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HomeMy WebLinkAbout08/30/1994, 7 - SC ENTERPRISES PROPOSAL (DALIDIO-BIRD-PRICE/COSTCO) city of San LUIS OBISPO M 91TE: COUNCIL AGENDA REPO ITEM NUMBER: Flo 41 FROM: Ken Hampian, Assistant City Administrative Officer `: r.?xt_rf sr-Nduleri SUBJECT: SC ENTERPRISES PROPOSAL (DALIDIO-BIRD-PRICE/COSTCO) CAO RECOMMENDATION Receive a proposal from SC Properties (formerly Trojan Enterprises) which outlines the combined interests of the Dalidio family, the project applicant, and major tenants (Price/Costco), and direct staff to initiate steps toward negotiating a development agreement to acquire open space on the Dalidio property. DISCUSSION Background: 1991-1993 The attached proposal from SC Properties is the result of a process which began in 1991 when the Dalidio family presented a land use concept to the City Council. The concept included significant open space on the Dalidio property in exchange for roughly an equal amount of commercial and high-density residential land use designations (40 and 12 acres, respectively). At that time, the family was proposing to sell 67 acres of property to the City to the City for open space at an approximate price of$5.8 million. The Council "conceptually endorsed" the land use concept, but in February of 1992 directed staff to complete a fiscal impact analysis relative to the economic aspects of the proposal. A contract for the fiscal analysis was approved by Council with the firm of Economic Research Associates (ERA). ERA completed their "Land Value Analysis" in January of 1993, at which time the Council provided staff with more specific direction relative to negotiations to acquire the open space. After several months of difficult discussions with representatives of the Dalidio family (Andrew Merriam and Mike Morris), a proposal was submitted by the Dalidio's in September 1993 which included the following major provisions: ■ 40 acres of commercial land use ■ 12 acres high density residential land use ■ 60 acres in an open space easement without compensation by the City ■ 10 acres held in "reserve" for at least five years ■ 60 acre open space easement dedicated in fee to the City if "reasonable development" is eventually allowed on the 10 acre reserve ■ To obtain the open space, agreement is formalized on the above provisions (and other less significant ones) through the negotiation of a development agreement. 7 city of San Luis oBispo i COUNCIL AGENDA REPORT Pae 2 In addition to the Dalidio proposal, at about the same time the City received separate(although related) proposals for development agreements from Price/Costco and the proposed developer of the property, Bill Bird (then of Trojan Enterprise; now of SC Properties). These proposals were taken to the City Council in closed session in November 1993. While the Council affirmed its continued interest in pursuing the Dalidio open space acquisition, it was agreed that the negotiation of a development agreement was premature because a formal development application had not yet been submitted by Mr. Bird. The submission of a development application was considered necessary to formalize the proposal, to verify the participants in the project (e.g. as opposed to dealing with "prospective tenants"), and to give staff something specific to work with in analyzing costs. The Council also agreed that a single proposal should be submitted to the City by the project applicant which consolidated the interest expressed in the three separate development agreement proposals previously submitted by the Dalidios, Mr. Bird, and Price/Costco. In December of 1993, Mr. Bird submitted his initial development application to the Community Development Department.. Background: 1994 Although staff completed a preliminary review of the development plan and met with the developer and other participants to discuss the plan, this application was never considered "completed". This is because Mr. Bird indicated that further plan revisions were being made, primarily to satisfy the interests of Price/Costco, and a final development.plan would be submitted later. The revised plan was submitted in April of 1994, and included correspondence from both the Dalidio family and Price/Costco confirming their support for the plan and involvement in the project. In transmitting the plan, Mr. Bird also requested that the City provide estimated costs of project review fees, development impact fees, and infrastructure. He requested these estimates in order to complete negotiations with prospective tenants, which was a prerequisite to providing the "consolidated proposal" asked for by the City. The cost estimates were provided by staff(with copies to Council) on May 20, 1994. The development application itself, however, was not processed pending Council action on the Dalidio area as a part of the Land Use Element update. The Council affirmed the land use concept for the area on June 14, 1994, and processing of the application is now underway. Consolidated Proposal On July 19, 1994, Mr. Bird presented staff with the attached proposal (dated July 15, 1994). This proposal is intended to reflect the interests of Mr. Bird, the Dalidio family, and the "major tenants including Price/Costco and others% At this time, staff is only asking if Council wishes to proceed with the negotiation of a development agreement. ' Development agreements are allowed under State law when cities wish to obtain unique or extraordinary public benefits through development, in exchange for concessions desired by project applicants. In this case, the City wishes to acquire open space and the applicant wishes to develop propery (to include 7-a2 City Of San LUIS OBISPO COUNCIL AGENDA REPORT Pae 3 a major tenant of interest to the City) in exchange for some concessions. If Council wishes to enter into such negotiations, then staff recommends the following process: 1. Agree to enter into negotiations on August 16th. 2. Direct staff to undertake detailed analysis of the proposal received on July 19th, and to prepare a recommended negotiation strategy for Council consideration. 3. Schedule a closed session to consider the analysis and strategy, and to provide staff with more specific direction on negotiating the real property components of the proposal. 4. Begin actual negotiations with the project applicant. With regard to step 3 above, it is important to emphasize that the closed session will be held under the "real property negotiations" provision of the Brown Act. This will limit discussion solely to the deal points involved in the real property acquisition, and not land use and design issues (which will be addressed through the usual community development/public hearing process). While an exact date for the closed session has not yet been set, it is staff's recommendation that this endeavor be handled with some priority, given the importance of time to the parties involved. Therefore, staff will attempt to schedule the closed session in late August or early September. In order to assist the City in the analysis and strategy development, it is staffs intention to use a real estate development consulting firm known as Kotin, Regan, and Mouchly, Inc. (KRM). It would also be our intent to include a representative of KRM at the initial closed session. It is important to recognize that negotiations of this type are complex and highly sensitive, and therefore require a sophisticated level of specialized technical assistance. The project applicant and tenants will undoubtedly bring such resources to any negotiation process, as other developers, and certainly Price/Costcos, do in other cities which enter into development agreements. KRM has extensive experience negotiating such agreements throughout the state, several involving Price/Costco specifically. CONCURRENCES An internal team consisting of the CAO, City Attorney, and the Directors of Public Works, Community Development and Finance, concur with the process and recommendations outlined in this report. The City Attorney and Assistant CAO will continue to be the lead negotiators relative to the Dalidio open space acquisition effort. FISCAL IMPACT Council direction to proceed with negotiations will essentially involve staff time, and assistance from KRM. The cost of this assistance (through the closed session) is expected to be well-within the CAO's approval authority without requiring a bid process (less than $5,000). Funds are ���M�►��nul�lPA city of San WIS OBISpo COUNCIL AGENDA REPORT Pae 4 available in the existing Economic Stability budget, which has a. remaining balance of approximately $40,000. Potential future technical assistance costs cannot be known until a specific strategy is detailed, and until the City decides whether such future assistance is needed. CONCLUSION A carefully negotiated development agreement can rrAult in the acquisition of several acres of high priority open space and commercial expansion which can increase the City's sales tax base. Pressure on the City in this regard is likely to increase in the coming months,'with the opening of factory outlet centers in both the North and South County. An analytic foundation for the cost-benefit of a project of this kind is available through the ERA study. However, the cost/benefit must be continually evaluated and updated through the negotiation process, if one is undertaken. Obviously, the City should not execute any agreement unless it is in the long term best interest of the City and its residents, both economically and otherwise. ALTERNATIVE The Council can choose not to enter into a development agreement for the project. Without a development agreement, there will be no open space dedication, and probably no project at this time. This is because the property owners will not consider the dedication of open space without an agreement with the City relative to other uses on their land. ATTACHMENT 1 - Consolidated Proposal SC Properties July 15, 1994 Mr. Ken Hampian Assistant City Administrator City of San Luis Obispo P.O. Box 8100 San Luis Obispo, CA 93403 Dear Ken: On May 20, 1994 you provided us with a schedule of fees and site costs prepared by city staff members. It is our understanding that these are costs the city anticipates would be assessed to the parties involved in developing the Dalidio property. Those parties include myself as the developer, the Dalidio Family as land owners, and the major tenants which include Price/Costco among others. Having just completed a review of the site work required to prepare for development to take place, including input by engineers and contractors, this letter is to advise the city exactly what amount of cost our project can afford to include. Your schedule was divided into three categories, Review Fees, Impact Fees and Infrastructure, so for ease of comparison I will use these same references. I. Review Fees These fees are typical to a development of this type and are included in our budget. My only comment would be related to the EIR item which I have always understood to include a focused review of traffic (already underway) , hydrology, and economic, based on the fact the General Plan Review EIR included our project. II. Impact Fees These fees included water, sewer and transportation. We are prepared to pay for the water meter installations and sewer fees per the city schedule as meters are connected. Due to the fact that this project will be providing its own water source (proven to be reliable) , and there will be a major contribution to the Prado Road interchange in lieu of transportation impact fees, the project cannot afford to also pay additional impact fees for water and transportation. ATTACHMENT 510 SOUTH GRAND AVENUE SUITE 3130 GLENDORA CALIFORNIA 91741 TELEPHONE(BIBI.963-1505 FAX(BIB) 963-5930 / O III. Infrastructure The cost to provide an adequate water and sewer distribution system and to provide for proper storm drainage is included in our budget. The construction of Prado Road, Highway 101 to Madonna Road, is also included, however the proposed connector road to Los Osos Valley Road is not. The connector road is not necessary to our traffic circulation. It may be something to consider when there is additional land development between us and Los Osbs Valley Road in the future. The right of way for the proposed connector road will not be made available until those other properties are developed. In regard to the Prado Road interchange, we have budgeted and are prepared to make a monetary contribution towards construction of $1.5 million, plus the right of way required. These funds are to be used to defray the cost of a full interchange assuming construction is scheduled as soon as possible, or to construct interim southbound off and on ramps on Highway 101 in the event the city elects to delay the interchange construction for funding reasons. In summary, the major difference between the city's cost schedule and this one we are presenting involves the Prado Road interchange. This is not a new subject. Over a year ago I requested the city begin studies on how to finance the interchange, if in fact the city, wanted such improvements to occur. As stated many times prior, a project of this size cannot absorb the amount of costs you have projected for this interchange. I believe between the increased property taxes and sales taxes this project will produce, the city has the basis for financing the interchange if they desire. The other important item for you to consider is the ±50 acres the Dalidios are prepared to turn over to the city. This acreage is not some mountain top or hillside which has little or no value, but rather is prime developable land. We conservatively estimate the Dalidio land being given to the city is worth over $5.5 million. The only concession being asked by the Dalidios for this gift is a city commitment to provide for any street improvements on Madonna Road that might be required when the residential parcel is developed sometime in the future. This response is being submitted with the concurrence of Price/Costco. For your information, Don Howells is now responsible for this Costco location, replacing Steve McArthur. Don works out of the same office as Steve, so Steve is available for historical purposes. For a number of reasons, I suggest that it is important for the city to respond and support our position on these financial issues at the earliest date possible. , The recent Supreme Court decision regarding agencies requiring land owners to dedicate property is being discussed at' great length throughout the state, including San 'Luis Obispo. I know that the Dalidios are hearing from many sources that they should not be giving up their land, 7� which is causing them to have second thoughts about the entire idea. That coupled with our own frustrations and the retailers' impatience indicate a need to reach quick decisions on whether this project should proceed or not. I assume this is an issue that will go before the council accompanied by a staff report which hopefully will address a solution to financing the interchange if it is recommended to be built. Please call if you have questions. Sincerely, William (L.;rBJ President WLB:kls 7-7 14EETIN AGENDA _ATE ITEM # MEMORANDUM RECEIVED COUNCILDO DR August 10, 1994 AUG 1 0 1994 ]DI, FIN DIR FIRE FIRE CITY COUNCIL p-1A+++'"-1A EY TO: City Council SAN Huls oslsPo,cA p,�RIG�y ❑ MGMTTEAM VIA: John Dunn, City Administrative OfficeKt ❑ C FILE FROM: Ken Hampian, Assistant City Administrative Officer G: SUBJECT: Dalidio Land Uses The August 16th agenda report was prepared in advance of the Council's July 27th meeting on the Land Use Element. During that meeting, however, there was considerable discussion concerning consistency between the latest submitted Dalidio land use plan and the original land use concept presented to the City Council. Although the purpose of the August 16th agenda item is solely to determine whether or not the City Council wishes to pursue the negotiation of a development agreement, the CAO has asked that some added information be provided concerning past and present proposed land uses on the Dalidio property. The initial proposal made in October 1991 included 40 acres of commercial designation, 13 acres of medium high density residential area, and 67 acres of "open space" (this included the agricultural land and a 5 acre eucalyptus grove along Madonna Road). These proposed land use divisions totalled 120 acres, and were based on acreage estimates and not on a formal survey. These numbers changed somewhat in subsequent proposals. The following proposed uses were submitted with the April 1994 development application, based on a property survey: 1. Medium High Density Residential 10.8 Acres 2. Commercial Retail 40.0 3. Open Space 55.0 4. Laguna Park Extension (Eucalyptus Grove) 5.0 5. Potential Urban Reserve Uses 9.2 6.. Road Rights of Way 11.0 Total 131.0 Acres You will note that the total is approximately 11 acres larger than the original proposal, apparently based on the findings of the formal survey. These 11 acres are proposed for use as road rights of way. It is important to emphasize again that the purpose of the August 16th meeting is to determine if Council wishes to engage in a process of negotiation. If so, staff will return to Council for direction on negotiations. Direction will be sought relative to a number of areas, both financial and with respect to the amount of open space verses ;other land uses desired by the City. The Council's position on the various components of a potential agreement should be considered together since, for example, a City priority in one area may require greater flexibility in another. Thus, the above is provided at this time for Council's information, but staff recommends that Council defer establishing a more specific position to the negotiation process. Kx:xx II Affiliated with Drivers Jonas Los Angeles San Francisco San Diego Chicago Boston Washington. D.C. Fort Lauderdale A LAND VALUE AND -FISCAL IMPACT OF DEVELOPMENT ALTERNATIVES FOR THE DALIDIO PROPERTY March, 1993 Presented to: THE CITY OF SAN LUIS OBISPO Presented by: ECONOMICS RESEARCH ASSOCIATES Project #10441 964 5th Avenue, Suite 214, San Diego. California 92101 (619) 544-1402 Fax: (619) 544-1404 TABLE OF CONTENTS Section I: SUMMARY FINDINGS AND RECOMMENDATIONS INTRODUCTION RESIDUAL LAND VALUE FINDINGS Development Program 1 Development Program 2 Development Program 3A Development Program 3B Impact of Interchange Value of Agricultural Land COMPARISON FISCAL IMPACT Development Program 2 Development Program 3A Devemopment Program 3B Fiscal Summary OPTIONS FOR THE CITY RECOMMENDATIONS GENERAL LIMITING CONDITIONS Section II: DEMOGRAPHIC CONTEXT DEMOGRAPHICS Population Growth Age Distribution Household Growth Projected Population and Households Household Size Household Income Housing Tenure. Section III: RESIDENTIAL AND COMMERCIAL MARKET CHARACTERISTICS DEVELOPMENT TRENDS Residential Units Commercial Valuation SINGLE FAMILY HOUSING CHARACTERISTICS Average Home Values Single -Family Development Projects HOUSING RENT CHARACTERISTICS Average Rent I- 1 I- 1 1-3 1-3 1-3 1-3 1-4 1-4 1-4 1-4 1-5 1-5 1-5 1-7 1-7 1-7 1-8 1-9 TABLE OF CONTENTS (CONCLUDED) Apartment Projects III- 6 RETAIL AND COMMERCIAL_ DEVELOPMENT TRENDS III- 6 Taxable Sales Trends III- 6 Taxable Sales By City Subareas III -10 Taxable Sales Per Capita III -10 Retail Outlets Per Capita III -15 Shopping Center Survey III -15 Commercial Land Values III -19 PLANNED AND PROPOSED PROJECTS III -19 Section IV: RESIDUAL LAND VALUE ANALYSIS IV- 1 ALTERNATIVE DEVELOPMENT_ PROGRAMS IV- 1 Development Program 1 IV- 1 Development Program 2 IV- 2 Development Program 3A IV- 2 Development Program 3B IV- 2 ESTIMATED LAND VALUES IV- 3 Process IV. 3 Discount Rate IV- 3 Findings: Development Program 1 IV- 4 Findings: Development Program 2 IV- 4 Findings: Development Programs 3A and 3B IV- 7 COMPARISON OF THE DEVELOPMENT SCENARIOS IV -10 Impacts of the Interchange IV -14 Value of Agricultural Land IV -15 Summary Comparison IV -15 Section. V: FISCAL IMPACT ANALYSIS V- 1 FISCAL IMPACT METHODOLOGY V- 1 Revenue V- 1 Expenses V- 2 FINDINGS V- 3 Development Program 2 V- 3 Development Program 3A V- 3 Development Program 313 . V- 3 Summary V- 3 Appendix: GENERAL LIMITING CONDITIONS LIST OF FIGURES AND TABLES FIGURES Figure 1: SUBJECT SITE 1-2 TABLES Table I- 1: COMPARISON OF ESTIMATED 1992 RESIDUAL Table III- 2: LAND VALUES PER ACRE . I- 6 Table II -1: SAN LUIS OBISPO COUNTY POPULATION GROWTH II- 2 Table H- 2: AGE DISTRIBUTION 11-3 Table 11- 3: SAN LUIS OBISPO COUNTY HOUSEHOLD GROWTH II- 5 Table II- 4: PROJECTED POPULATION AND HOUSEHOLD GROWTH II- 6 Table II- 5: HOUSEHOLD TYPE AND SIZE II- 7 Table II- 6: HOUSEHOLD INCOME DISTRIBUTION 11-8 Table II- 7: DISTRIBUTION OF HOUSING UNIT OWNERS/RENTERS II -10 Table III- 1: DISTRIBUTION OF HOUSING UNIT OWNERS/RENTERS I11- 2 Table III- 2: HOME VALUE DISTRIBUTION - III- 4 Table III- 3: SELECT SAN LUIS OBISPO COUNTY RESIDENTIAL HOUSING SUBDIVISIONS III- 5 Table II1- 4: HOUSING RENT DISTRIBUTION 111-7 Table 1II- 5' SELECT SAN LUIS OBISPO CITY MULTI -FAMILY HOUSING COMPLEXES III- 8 Table II1- 6: HISTORICAL SAN LUIS OBISPO CITY TAXABLE SALES REVENUE AS A PERCENTAGE OF THE COUNTY TOTAL III- 9 LIST OF FIGURES AND TABLES (CONTINUED). Table I1I- 7: ANNUAL SALES BY GEOGRAPHIC AREA FOR SELECT MAJOR RETAIL CATEGORIES III -11 Table III- 8: TAXABLE SALES PER CAPITA BY MAJOR RETAIL CATEGORY III -13 Table III- 9: NUMBER OF RETAIL PERMITS PER CAPITA BY MAJOR RETAIL CATEGORY III -16 Table III -10: SHOPPING CENTERS IN SAN LUIS OBISPO CITY III -17 Table III -11: COMMUNITY & REGIONAL SHOPPING CENTERS IN SAN LUIS OBISPO COUNTY III -18 Table III -12: COMPARABLE COMMERCIAL LAND SALES III -20 Table IV- Es DEVELOPMENT SCENARIO: PROGRAM 1 IV- 5 Table IV- 2: RESIDENTIAL LOT PRICE CALCULATION IV- 6 Table IV- 3: DEVELOPMENT SCENARIO: PROGRAM ,2 IV- 8 Table IV- 4: DEVELOPMENT SCENARIO: PROGRAM 3A IV- 9 Table IV- 5: DEVELOPMENT SCENARIO: PROGRAM 313 IV -11 Table IV- 6: RESIDUAL LAND VALUE - PROGRAMS 3A & 3B IV -12 Table IV- 7: COMPARISON OF ESTIMATED 1992 RESIDUAL LAND VALUES PER ACRE IV -13 Table IV- 8: IMPACT OF INTERCHANGE COSTS IV -16 Table IV- 9: COMPARISON AFTER INTERCHANGE COSTS IV -17 Table V- 1: PROJECTED GROSS FISCAL REVENUE - PROGRAM .2 V- 4 Table V- 2: PROJECTED NET FISCAL REVENUE - PROGRAM 2 V- 5 Table V- 3: PROJECTED GROSS FISCAL REVENUE - PROGRAM 3A V- 6 Table V- 4: PROJECTED NET FISCAL REVENUE - PROGRAM 3A V- 7 LIST OF FIGURES AND TABLES (CONCLUDED) Table V- 5: PROJECTED GROSS FISCAL REVENUE - PROGRAM 313 V- 8 Table V- 6: PROJECTED NET FISCAL REVENUE - PROGRAM 313 V= 9 Section I SUMMARY FINDINGS AND RECOMMENDATIONS This section presents a summary of this report's findings and recommendations. Please refer to this report's other sections for a more thorough discussion of the analysis, assumptions, and issues. INTRODUCTION The 1.19 acre Dalidio property is prime agricultural land located adjacent to the City of San Luis Obispo in unincorporated San.Luis Obispo County, as shown in Figure I-1. The site is located next to the city's regional shopping center, Central Coast. Plaza, and .is very visible from Mghway 101. Because of its visibility, it also serves as an important open space gateway into the city. The property owner has. proposed to subdivide the property and develop 40 acres as a shopping center complex that is planned to relate to and help revive Central Coast Plaza. An additional 12 acres of multi -family residential development also is proposed. The balance of the property, or 67 acres, is offered for sale to the City. According to City staff, an alternative use that has been suggested for this .119 acre parcel, if it were annexed, is a residential subdivision development over the entire property. The City Council has conceptually agreed to the land development proposal. The City's intent is to help revitalize Central Coast Plaza with the commercial development and preserve the 67 acres as agricultural land. The development proposal will require annexation into the City, a general plan amendment, and a zoning change. The value of the 67 acres which is offered for sale 'to the City is in question. The City, therefore, commissioned this study to help it evaluate the property's value and analyze the fiscal impacts of the development in order to assist the City in negotiating an agreement with the property owner. I-1 —n, su .dl w•r' a 3. 3: `I�; ! rx � Ir..ryl A Cer,e Sen Coir Obispo , G its 5 1' �I qli 1 nwl«�C SAN LUIS OBISPO ` I I01 MA I Dalidio Property, Site Location �•"� �+rMADONNI \\ R ROAD • (Nr*AI 4IfAIA ` COAST O` AIA if r TV l _ / - / u ' r 1� M 010 -W e._ _ �?,u 'eels P •r• puF 1 1 , 1 AuaeNt� rarrrrreac snn MV1etm' fAN lM OMA �r v. I r4 Q s 3 .D:.NDa w +! Y +.r I 1 � YMIMO►4,e - Figure I-1 Dalidio Property Site Location I.N ' 1 / \ a �jerf .r ie "rrb e •"`p. y � �I 1 1411C,EEl I �� ntN[N ry IRriMtIMI • AM 1P 3 .D:.NDa w +! Y +.r I 1 � YMIMO►4,e - Figure I-1 Dalidio Property Site Location RESIDUAL_LAND VALUE FINDINGS - Four different development programs were analyzed: • Development. Program 1 - • Development Program 2 • Development Program 3A - • Development Program 3B - Development Program 1 Existing entitlement under county zoning; Single familv residential subdivision; 435,000 square foot retail center and 12 acres of multi-. family housing; 240,000 square foot retail center and 12 acres of multi- family housing. The 1992 estimated in -use value is $2.11 million, or almost $18,000 per acre (for the 119 acres). This is the estimated value of the Dalidio property if there was no opportunity to annex.into the city and obtain greater entitlements and, therefore, the only opportunity left was to develop under the County's zoning. The current market value of the property may be higher due to the market's anticipation that the property will be annexed. Development Program 2 The 1992 estimated in -use ,value equals $11.16 million, or almost $94,000 per acre (for the 119 -.acres). This=estimate generally substantiates the property owner's claim that residential property is valued at approximately $85,000 per acre. Development Program 3A The estimated residual land value of scenario 3A is $13.11 million before allocating required Highway 101 interchange development costs. This is equivalent to over $110,000 per acre for the. total Dalidio property. I-3 Development Program A3 Scenario 3B generates a residual land value of $10.91 million.dollars before -allocating the required Highway 101 interchange development costs, or almost $92,000 per acre over the 119 acre Dalidio property. Impacts of the Interchange A critical factor that will affect the land valuecomparison is how much of the $10 million freeway interchange costs must be borne by the Dalidio property owner/developer under the different development scenarios. Scenarios 1 and 2 may not require the new freeway interchange, and, therefore, may not incur this additional cost. However,;'scenarios 3A and 3B would require the interchange. According to City staff, the Dalidio property, if developed with a regional commercial center, would generate 54 percent of the traffic demand which the interchange is intended to serve. Based on this allocation, the Dalidio property owner/developer would be responsible for an additional $5.4 million in costs, but since a credit may be granted for the land dedicated for right-of:way (without losing any entitlements), the property owner would only incur $3.4 million in additional development expenditures related to the interchange. If this cost is financed through a public debt instrument, serviced, over time; the present value of the debt service could be less than $3.4 million depending on the discount rate used. Deducting this additional required cost for the interchange lowers the estimated residual value of scenario 3A to $9.71 million and scenario 3B to $7.51 million. Value of Agricultural Land Another consideration is the use of the 67 acres of open space under the commercial development scenarios. Since the City intends to . keep the 67 acres in agricultural production, another approach would be to simply zone the 67 acres for agricultural use and negotiate. a deed restriction that limits the use of the 67 acres to agricultural production in perpetuity. Based onprime agricultural land value in the area, according to local brokers, the 67 acres maybe worth an additional $670,000 to the existing property owner under the I-4 commercial development scenarios. This value should be added to the estimated residual land value under the commercial development scenarios. COMPARISON Table I-1 presents a summary of the estimated residual land value for the total 119 acre Dalidio property under the first three development programs analyzed, before and after allocating interchange costs and providing credit for the agricultural land value, (if the property owner were to retain the 67 acres of open space in agricultural production). It is clear that the value of the land is enhanced substantially through annexation and rezoning under the City's jurisdiction. Scenario 2, the residential subdivision scenario, generates the highest relative value after interchange costs are allocated to the alternative commercial scenarios. The residential scenario .generates almost $800,000 more in value than the highest value commercial development program, scenario 3A (assuming the property owner retains the agricultural land and its associated value under the commercial scenario). This differential is equivalent to $6,500 per acre,over the 119 acre property, (or $12,000 per acre if applied to the 67 acres of open space). This differential is greater between the residential scenario and the lower value commercial development.program, scenario 3B. Again, the difference in value between the commercial scenarios and the residential scenario is due primarily -to the interchange cost incurred under the commercial scenarios. It is important to note that the different values among the scenarios are only accurate approximations if the entitlements under each scenario are realistic. If it is unlikely that the residential subdivision scenario would receive government approval and the needed zoning, then the value estimated for that scenario does not provide a realistic basis for comparison. FISCAL IMPA Development Program 2 The residential subdivision scenario generates an annual net.fiscal surplus of $109,000 by the year 2004 (at build -out), equal to $68,000 in 1992 dollars. I-5 7 N m %n N N N N 8 $ 25 wlZ5 "'I 25 z a0000 S2�o52oQ 25 25 25 C7 - p, $ $ g oz �rmw ° rA C7 ° w eve w > g U � o m 7 Q ea V > 7 W tn ` Ok V Aaaa � a o���aa o to v Development Prognun 3A The 435,000 square foot retail center and multi -family housing development scenario generates an- annual fiscal surplus of $649,000 in year 2004, equal to $406,000 in 1992 dollars. Development Prognun 30 The 240,000 square foot retail center and multi -family housing development scenario generates an annual net fiscal gain of $420,000; equal to $263,000 in 1992 dollars. Fiscal Summary All of the development scenarios generate a fiscal surplus for the City._ The net fiscal surplus under the commercial development scenarios by the year 2004, (when development program 2 is built -out), is $195,000 to $338,000 more per year (in 1992 dollars) than the fiscal surplus generated by the residential subdivision scenario. Also, since the commercial developments are absorbed sooner. than the single-family residential development, they generate fiscal revenue earlier. From a fiscal perspective, it is in the City's interest to pursue the commercial development scenarios rather than the residential development scenario. OPTIONS FOR THE CITY Based on the analysis in this report, we believe the City . _has three options; - 1) Compensate the property owner for the difference in value between the residential subdivision scenario and the commercial development scenarios in exchange for the 67 acres of agricultural land. 2) Instead of compensating the property owner by purchasing the 67 agricultural .acres, allow the property owner to retain title to the agricultural acreage, with deed restrictions limiting the property to agricultural use in perpetuity, and compensate the owner by purchasing a less costly conservation easement. Further, the cash compensation could be I-7 reduced by granting enhanced entitlements instead, such as increasing the amount of land that can be used for multi -family housing. This approach would avoid the need to expend public funds to protect open space on the Dalidio property; however, the amount of open space preserved would be somewhat less. 3) Annex and zone the property according to the commercial development scenario, and zone the 67 acres of open space for agricultural use, without further compensation to the property owner. The City might be able to require a deed "restriction on the agricultural open space to protect it in perpetuity. The commercial entitlements would still enhance the property's value compared to theentitlements currently allowed under- the County's zoning, would provide economic use of the property, and would provide enough incentive for a developer to pursue the commercial development the City desires. RECOMMENDATION It is recommended that the City rezone the Dalidio property to allow development scenario 3A, but not compensate the property owner for the value of the 67 acres of agricultural open space. Instead, the City should use its police powers, specifically the General Plan, zoning regulations and subdivision approval, to establish the uses it deems appropriate per City policy, including zoning the 67 acres for agricultural use. Clearly, economic use of the property is retained with the commercial, r could -family housing, and agricultural uses permitted, and, since scenario 3A is an increase in the property's current entitlements under the County's jurisdiction, there is sufficient incentive for the property owner to pursue the scenario 3A development program. The City desires to preserve the 67 acres of agricultural open space in perpetuity. If the City cannot.require a deed restriction as a condition of subdivision approval per its sudivision ordinances or a development agreement, the City should negotiate a deed restriction by enhancing multi -family residential entitlements rather than spending public funds. If the City can require a deed restriction, such a concession does not appear necessary to entice the property owner to develop the commercial scenario if the property owner's only alternative option.is to retain the land in agricultural use or develop under the I-8 County's limited zoning entitlements. This recommendation is based on the understanding that the residential subdivision scenario is not an entitled development right under current zoning, and that the County would not permit an upzoning to urban use per their general plan policy. GENERAL LIMITING CONDITIONS The findings and recommendations in this report are based on original research, secondary data, assumptions, and input from other parties, including City and County staff, real estate brokers, and property managers. The projections were made during July and August, 1992, and are qualified ,by conditions presented in Appendix A- 1-9 Section II DEMOGRAPHIC CONTEXT This section describes the relevant .demographic characteristics that influence the assumptions in theresidual land_ value analysis and fiscal impact analysis. DEMOGRAPHICS Population Growth The City of San Luis Obispo's population grew by 2.05% per year between 1980 and 1990, for a total increase of over 7,700 people and an annual increase of 771 people, as shown in Table II -1. In terms of absolute growth, the city added the second greatest number of people among the cities in San Luis Obispo County, second to El Paso de Robles. In terms of annual growth rate, however, San Luis Obispo had the second lowest among the county's cities and experienced an annual growth rate much lower than the 3.40% rate experienced county -wide. Overall, the county added 62,000 people during the 1980's or almost 6,200 people per year on average. Age Distribution The median age of the populations in San Luis Obispo city and county increased between 1980 and 1990, as shown in Table II -2. The increase in average age, however, was more pronounced in the county than in the city. The city still has a younger population On average than the county, which is not surprising given the student population inthe city. The major change in age distribution in the city during the 1980's was the increased proportion of people in the 35 to 44 year-old age category and the declining share of the 15 to 19 year and 55 to 64 year old populations. The college student age group of 20 to 24 years old is still the dominate age cohort in the city, followed by the 25 to 34 year-olds. Compared to the county as a whole, the city has a lower share of children; a higher share of teenagers, a much higher share of young adults between 20 to 24 years old, and a lower share of adults older than 35 years old, including seniors. The age distribution in the City of San Luis Obispo indicates a market which should have a higher than average demand for oz a azo Qaa W W as h a� o F ] c A. eh Cc meq Ci a 0 �0ac Z� moa U z 0 F a a O a a o F W o r N .: o o; a C r'.cc m en n o m O U O w v7 q 0 iy. h n en M 00 inz in N y U C! `� N N ONO' O (�+� N ay Z m. a .00 a vs �W 071 to In U c >, ti 7 a m V' 0 T cc C aa] tr. �O n 10 � z m O v a N N fA �. �` �,� ,� .OA f✓d O. fa 8 .r O pOpH;l N g 10 g O OL a a aa] tr. �O n i � z m v a i apartments and starter homes. Household Growth As shown on Table U-3, the city added 3,282 households between 1980 and 1990, for an annual growth irate of 2.11% and an average annual increase of 328 households. Again, the growth rate in the city was low for the county. County -wide, households increased by 3.27% per year for a total increase of over 22,100 households during the 10 year period, equivalent to an average annual increase of 2,200 households. Projected Population and Households The population growth rate in the City of San Luis Obispo is expected to fall in the 1990's. As shown in Table II4, population in the city of San Luis Obispo is expected to increase by 0.84% per year, for an average annual increase of 364 people. The number of households is expected to increase by 0.98% per year, for an average annual increase of 174 households. By the year 2000, the City of San Luis Obispo is projected to have 45,600 people and 18,688 households. Household Size As shown in Table 1I-5, the average household size in the Cityof San Luis Obispo is lower than the average household size in the county as a whole. The most. common household type in the city is the single person household, while the most common household type in the county is the two person family household. The city has a lower share of family households, and a higher share of non -family households. Again, the higher proportion of non -family households indicates greater demand for rental housing in the City of San Luis Obispo relative to the county. Household Income Median household income in the city is lower than the median county -wide. As shown in Table U-6,. the City of San Luis Obispo has a higher proportion of low and moderate income households relative to the county as a whole. The most common income II4 y OO N . co b R a z U e V C as Y x O� z O 00 t� Z O M •. F 0 y cc U C cc a 3 a0 y m p 0 a CL y 0 CF' vii N O p adz U O O U Q m d y W p c7 is C a D .a O x w h M x O0% F w r � u M � 4 0, cNo as p� `a O m %0 M O N O! N 0 xa �au H 0 U 0 a H r tl 0 C4 O, h R ' n vNy� D\ a0J .,� Z � a0 b v e epi �c Na71 z ..w U 0 y OO N . co b R a z U O N N r 0 C as Y A '^ vI v o y cc U C cc a y m p 0 CL y 0 CF' vii N O p U O O U Q m d y W p c7 is C a O N N r 0 gyp s F O c a a r 0 m O apZ m N m i 0 So O 4 yg azo °'Oa c m fV C1 < N 16 m O m o Z < F a 96 40 � O m V m ., x d 0 x C. N h h a Z d •, .+ m U q � O O aZ �m U Table II -S HOUSEHOLD TYPE AND SIZE NONFAMILY CITY OF SAN LUIS OBISPO SAN LUIS OBISPO COUNTY PERCENT 4,738 PERCENT FAMILY 1990 OF TOTAL 1990 OF TOTAL 2 persons 3.825 22.696'i= 24,424 30.498 3 persons 1,716 10.1% 11,053 13.8% 4 penoos 1329 'J.$9� '; .: .. 9.941 12.4% 5 persons 497 3.0% 4,213 5.2% 6persone W.: '17T :: 1'0%`; 1:603 .2.6% 7+ persons 91 0.5% 1,086 1.4% NONFAMILY 1 person 4,738 28.0% 19,142 23.8% 2penotu .: .2.126 "`:':: .. '..,;12.5%.'�'... 5;444 6.8% 3 persons 1,153 6.8% 1,756 2.2% 4 perdorui . `1.012 ' 6.0% .. _ 1,222. 1:5% 5 persons 187 1.1% 253 0.3% 6. person -;::: ::... 62 .. ::. 0.4%:: ,... 86 0.1% 7+ persons 39 0.2% 58 0.1% Total 16,952 100.0% 80,281 100.0% Persons Per Household 2.39 2.53 Source: 1990 U.S. Census, and ERA. Source: 1980 and 1990 U.S. Census, and ERA. _ 0 Table II -6 HOUSEHOLD INCOME DISTRIBUTION (1989s) CITY OF SAN LUIS OBISPO SAN LUIS OBISPO COUNTY PERCENT PERCENT DOLLAR AMOUNT 1990 OF TOTAL 1990 OF TOTAL $0.[0$4,999 '1,2$2 3,282 4.1% $5,000 to $9,999 1,701 10.1% 6,627 8.3% $10.000 to;$14,999 1,936 11:4% 7.292 9.1% $15,000 to $24,999 3,274 19.4% 14,482 18.1% $25,000 to $34;999. 3607 '; 15 446. 13,226 16.5% $35,000 to $49,999 2,449 14.5% 15,046 18.7% $50,000 to $74,999. 2,099 12:4% 12,461 $75,000 $99,999 922 5.4% 4,277 5.3% $100,000to$149,000 441:: r.. 2.6%' 2,295 2.96/o $150,000 and up 209 1.2% 1,207 1.5% Total 16,920 100.0'% 80,195 100.0% Median Income: $25,982 $31,164 Mean Income: $35,613 $39,565 1980 Median Income (1979 $): $13,112 $14,805 Mean Income (1979 $): $17,858 $18,413 Source: 1980 and 1990 U.S. Census, and ERA. category in the city is the $15,000 to $24,999 category, followed by the $25,000 to $34,999 category. The household income distribution in San Luis Obispo City may be skewed somewhat by the student population. The income distribution in general . indicates a moderate income market where rental housing and moderate pricedownership housing should receive the strongest support. Housing Tenure The demographic characteristics for the City of San Luis Obispo, relative to the county, indicate -relatively stronger support for.rental and affordable housing. As shown in Table II -7, the distribution of owners to renters in the city compared to the county confirms this characteristic. In the city, 44% of the households own their homes, compared to almost 60% of the households country -wide who own their homes. The majority of households in the city are renters. While the distribution between owners and renters remained relatively the same county -wide between 1980 and 1990, the City of San Luis Obispo experienced a decline in the share of owners and an increase in the share of renters. Still, the city experienced an average annual increase of 98 homeowners between 1980 and 1990 due to overall growth. The county experienced an annual.increase of 1,262 homeowners during the same period. The number of renters in the city increased by 225 households per year between 1980 and 1990. County -wide, the number of rental households increased by 950 households per year during the decade. Therefore, the city's capture of the county -wide rental housing market, at 24%, is greater than its 8% capture of the county -wide home ownership market. II -9 Z < m N e F h e N O. � Cd co {L o O w r N L e a q i Y Y � e F O N O b N ^1 O N � q a e a O m r n n L e n J UF p v eOn e e w C. ._. O N e r b b 00 4h N N m N F 16 C � O i+ F r U O O M Q r O � f` V p• N O. � F J z < o V p a h e aF r 06 6 � O O M M O a N r e a q Y Y � e F 3 Y o a Section III RESIDENTIAL AND COMMERCIAL MARKET CHARACTERISTICS This section presents market value and development trends for multi -family housing complexes, single-family subdivisions, and commercial development in San Luis Obispo to provide a basis for value and absorption assumptions in the residual land value analysis. DEVELOPMENT TRENDS Development in San Luis Obispo increased substantially during the first half of the 1980s.. Since then, however, development activity has slowed significantly, falling to levels that were lower than those experienced during the beginning of the decade. Table III -1 presents building unit activity in San Luis Obispo City and County from 1980 to 1991. Residential Units Annual single-family units permitted ranged from a low of 23 in 1991, a recessionary year, to a high of 367 units in 1986, before the end of the statewide real estate boom. The average annual number of single-family residential units in the city during the overall period was 156 units. County -wide, an average of 1,709 single-family units were permitted. The city's share of county -wide single-family units has been decreasing, from a high of 18.7% in 1986 to a low of 2.3% in 1991. A similar trend occurred for multi -family housing, except that unit activity peaked a few years earlier. Multi -family residential units permitted ranged from 432 units in 1983, to 23 units in 1991, for an annual average of 127 units. County -wide, an average of 560 multi -family units were permitted annually. The city's share of county -wide multi -family housing activity averaged 22.7% during the twelve year period. The combined number of residential units built in the city ranged from 46 units in 1991, to 583 units in 1984, for an annual average of 283 units. County -wide, total residential units averaged 2,269 per year. The city's share of county -wide residential housing activity has been 12.5% on average, but has been decreasing over the last few years. p61 F an N N 3 A � N M m N e -k i. p . N w C D O -a g p fA O 0 Y OG U [� N p . N w r NNN tot VVVII ,wNCi � 00 � � ggg� H 0001D, N ? e N M r OD N N a sp a4 S� w � wl h i 2 6 W D 7 Q O F W o U V a F iR Commerdal Valuation Commercial permit value in the city also peaked in the mid-1980s, and averaged $10.8 million per year. County -wide, commercial unit value averaged $32.6 million per year. On average, 33.2 percent of county -wide commercial development activity occurred in the City of San Luis Obispo during the twelve year period analyzed. During the late 1980s, the, city's share of county -wide commercial development was even greater; reaching a high of 60.8% in 1986.. SINGLE FAMILY HOUSING CHARACTERISTICS Average Home Values Despite the. City of San Luis Obispo's lower median household income, home values in the city are higher than average for the county, as shown in Table III -2. According to the 1990 census, the median value of a house in the city was $241,000 compared to just over $215,000 county -wide. Almost half of the homes in the City of San Luis Obispo are valued in the $200,000 to $300,000 range. Single Family Development Projects Several residential subdivisions in the county were surveyed regarding their typical unit size, lot size, and sales price. Nine projects were identified that are currently selling homes, as shown in Table III -3. The two projects closest to the Dalidio property, Clover Creek and Edna/Islay are selling homes that range in price from $220,000 to $280,000. The lot sizes range from 6,000 to 7,500 square feet and home sizes range from 1,600 to 2;500 square feet, which are comparable lot sizes for a residential subdivision on the Dalidio property. Lower prices ranging from $157,500 to $182,000 for similar size lots are found at Mesa Sands in Nipomo. The Stone Ridge development on Broad Street and Lawrence Drive sells homes from $180,00 to $340,000 on lots ranging from 5,000 to 7,000 square feet. According to residential brokers that were contacted, new home values in the city have fallen somewhat during the recent recession. Single-family housing at the density that city zoning would permit for the Dalidio property would be priced at approximately $200,000 to $250,000. Table 111-2 HOME VALUE DISTRIBUTION (1990s) Source: 1990 U.S. Census. and ERA. CITY OF SAN LUIS OBISPO SAN LUIS OBISPO COUNTY PERCENT PERCENT DOLLAR VALUE 1990 OF TOTAL 1990 OF TOTAL $0 to 549,999 29 0.5% 332 1.0% $50,000W549,949::-: .21% 2,035 5.9% 5100.000 to 5149,999 445 8.0% 5,004 14.3% 1150.000 to $199,999 964 -I5.6% 8,101 23.1% $200,000 to $299,999 2,670 48.1% 11.585 33.1% S300,000 to S499,999 23.0% 6,617 19.9% 5500.000 and up 151 2.7% 1,335 3.9% Total 5.552 100.0% 35,009 100.0% Median Value: 5241,000 $215,300 Source: 1990 U.S. Census. and ERA. Table 111-3 SELECT SAN LUIS OBISPO COUNTY RESIDENTIAL HOUSING SUBDIVISIONS NAME LOCATION HOME SIZE LOT SIZE SALE PRICE Ciover Creek, Farm Rd*. &' Broad St:' 1,660-el4560LE 7,5009 1 1 $224,000 - $280,000 0 San Luis Obispo Ventana Del Mar Ventana & James Way 3,600 s.f. 10,000 s.f. $425,000 Pismo Beach Meadowlark Farms Spring St; &Niblick Ad $295;000 Paso Robles River Bluff & Niblick & So. River Rd. 1,600 - 2,200 s.f. 7,000 - 12,000 s.E $190,000 River Bank Paso Robles Edna/Islay Tank Farm Ad. &'Bro a*d St: 1j750 w 2,200 s.f. 6,000 - 7,00 sl S220,066 - $275,000 San Luis Obispo Mesa Sands Division & Frontage 1,400 - 1,800 s.f. 6,000 - 7.500 s.f. $157,500 - $182,000 Niporno Kqtlierine Court Creston Road &,Niblick Road 1,200 i.f. 10,000 s.f. Paso Robles Stoneridge Broad St. & Lawrence Dr. 1,250 - 2,800 s.f. 5,000 - 7,000 s.f. $180,000 - $340,000 San Luis Obispo Source: Respective Realtors, Agents. Developers, and ERA. HOUSING RENT CHARACTERISTICS Average Rent As shown in Table III4, rents in the City of San Luis Obispo, at $546 a month, are slightly higher than the average rent of $510 in San Luis Obispo county. In the city, approximately one third of the rental units rent for $300 to $500 per month and almost one third rent for $500 to $750 per month.. Apartment Projects Several apartment complexes were surveyed within the city as shown in Table III -5. The weighted. average .vacancy rate of the units surveyed was 12.5% among the apartment complexes that reported their vacancy rates. While this rate is high for apartment complexes and normally would indicate a weak market, there is substantial seasonal fluctuation in occupancies due. to the university. Most of the apartment complexes that reported high current vacancy rates stated that they are fully occupied during the school year. Assuming these complexes that rent to students are fully occupied, the vacancy rate among the apartment complexes surveyed would be 2.7%, indicating a strong apartment market. Rents ranged from a low of $480 to a high of almost $1,100 per month for a senior . housing complex that provided meals and other services. The newest apartment complex surveyed, Parkwood Village Apartments, charged rents ranging from $525 for a studio to $845, plus utilities, for a two bedroom unit; most of this apartment complex is comprised of 2 -bedroom units ranging renting for $700 to $845 a month plus utilities. RETAIL AND COMMERCIAL DEVELOPMENT TRENDS Tarable Sales Trends Table III -6 presents taxable sales revenue in the City of San Luis Obispo from 1987 to 1990, and estimated for 1991. As shown, the city's share of county -wide taxable sales revenue declined from 38.9% in 1987 to 36.8% in 1990. Including non -retail outlets that pay sales tax, the city's share of county -wide retail sales decreased from 33.6% in 1987 to 31.3% in 1990. Other than apparel sales, for which the city saw a slight increase in its share of county -wide sales, the city's share of county -wide sales in all other retail categories declined III -6 MONTHLY RENT SO to 5199 $206 to S299 $300 to 5499 5500 to 3749 $750 to $999 $1.000 and up No Cash Rent Total Median Rent: Source: 1990 U.S. Census, and ERA. $546 $510 Table 111-4 HOUSING RENT DISTRIBUTION (1990s) CITY OF SAN LUIS O111SPO SAN LUIS OBISPO COUNTY PERCENT PERCENT 1990 OF TOTAL 1990 OF TOTAL 366 3.9% 1,294 4.2% 513 5.4% 11789 5.896 3,074 32.6% 11.259 36.4% 10.529 34.0% 1,588 16.9% 3,773 12.2% 802 8.546. " 1.246 4.096 146 1.6% 1.047 3.4% 9,415 100.0% 30.937 100.0% Source: 1990 U.S. Census, and ERA. $546 $510 I C6 g mm (�. n ° N 0 r`, N O fi C U tQ y + Ab ¢16� a e/a� gN '�' a II�ycy 9i�E 9f� 8 9 'VO •� .g 9 7 .� 9 7 •� 9 Y O O L M K. V V C: fA N V N to 0 m 8 8 00 a SO iia ED3 � cad moy3 m � d N F `o $ M� NHC7N� P $ NO r y tQi = OD `Y' c 64 Go ate, % F � Y p aW 67 C' e y m �m Om 0•N rpp p �r1 }1 _ N Y � } N CI r V rN N .+Nm rfl to r r N r N rN N O a IOU or h e CIO $ m 9 oGi >e�xal� as <- mWm "N tC" 7. q�M OOH 5 i i A 1 S R W q A OR -1 n, cc A ta z M Me W Q� ti n .W! It n Cl 0 ci P PMI PI r 6 0! �ppel 00 00 96 1: 4 1 S slightly. The most pronounced decline occurred in sales from drugstores, packaged liquor, home furnishings and appliances, auto dealerships, and "all other outlets." Taxable Sales By City Subareas Within San Luis Obispo almost all of the sales occur -in Downtown or West San Luis Obispo, which includes the Dalidio property, as shown in Table III -7. Between Downtown and West San Luis Obispo, Downtown captures a majority of sales associated with apparel (although a slightly lower share of women's apparel sales), arts and gifts, sporting goods, florists, photo equipment, stationery and books, jewelry, specialty items, home furnishings, eating and drinking places that serve alcohol, and garden supplies. West San Luis Obispo captures a greater share of sales associated with shoes, limited price variety goods, department store items, music, eating and drinking places that do not serve alcohol, and radios and appliances. Taxable Sales Per Capita Table III -8 presents taxable sales per capita ,by major retail category for the City of San Luis Obispo, the County of San Luis Obispo, the City of Santa Maria (considered the most competitive city for regional retail outlets), and the State of California. As shown, the City of San Luis Obispo captures a much higher .amount of sales per capita for apparel, packaged liquor, eating and drinking, home furnishings and "appliances, auto dealers and supplies, service stations, and other retail outlets than the other jurisdictions. For some retail categories, the City of San Luis Obispo has higher than average sales per capita for the county or the state; but lower sales per capita when compared to Santa Maria. These categories include general merchandise, food stores, building materials and farm implements. The city has lower than average per capita sales attributed to non -retail outlets compared to the county, state, and, Santa Maria. For retail outlets overall, the City of San Luis Obispo has a much higher than average sales per capita compared to the county or the state, and a comparable sales per capita figure when compared to the City of Santa Maria. III -10 Table 111-7 ANNUAL SALES IIY GEOGRAPHIC AREA FOR SELECT MAJOR RETAIL CATEGORIES (1991) CATEGORY Women's apparel NORTH SLO So DOWNTOWN 53,546,800 SOUTH SLO so WEST SLO 53;798,800 RANDOM 5374,400 Men's apparel SD .> 51;163;200 5o $680,800 SO Family apparel so 56,129,600 50 53,774,000 s0 .Shoe it: rd .. _ .6205.300 , ... 62 344:400 :.:.: ":::. $6 52,629.200 so Limited -price so $621,600 s0 $976,000 s0 variety stores Department and 30 57,480,800. 557,403.600 s0 dry goods stoles Newspaperand so s0 5570,000 s0 s0 magazine stands Art, gifts, and Sq 52;468,400 m 5983.600 so. novelty stores Sporting goods so SS,193,600 $1,882.400 52,987,600 50 and bicycle stores Florist shojis 5273,600. 5273.600 5778.400 S0 s0 Photo. equipment 60 $1,848,400 So 60 s0 and supplies .: . .... Musie stores- . .. ....., .. " „30 .. :... ..... .. ": $2:766.000 .... ::.. 5794.800 .. 53.447.200 S404,009 Stationery So 64345.200 6o $1,432,000 so and bookstores Jewelrystores . 50. 52;355,600 $0 11248,000 SO Specialty stores S2,146,400 $6357,600 52,424.800 5916,800 So Entingtdrinking 51.918,800 $1,662,460 $3,903.200 57,269,200 $0 places (dry) Candy, nut, and so So so $81,600 50 confectionary Household and 52328,800 $3,490,000 S3,314,800 51.177,600 so home furnishings Source: Hinderllter, de Llamas a Associates; and ERA. o Table III -7 (concluded) ANNUAL SALES BY GEOGRAPHIC AREA FOR SELECT MAJOR RETAIL CATEGORIES (1991) CATEGORY Radio and NORTH SLO s0, .' DOWNTOWN .. , . ", .5305200 "',' SOUTH SLO SZ,744,400 WEST SLO 51,342,000 RANDOM 50 appliance stores Eating/drinking 52,350,400 57,168,000 59,961,600 52,798,000 5276,400 places(beerhvine) Eating/drinking 50;` 57.779;600.,. 51,892,000 $6,831,200 $120.000 places (all liquor) Garden supplies s0 $239,600 52,104,000 s0 s0 and equipment Total $9,173,200 $67,489,600 530,370.400 $99,717,200 $1,174,800 Source: Hinderllter, de Llamas a Associates; and ERA. \ . � � a § . o . k < § » : E § § k k § 2 >1_ °B � ° � - ■ 2 tot �■ } 5 ] § k k § k ' .0 [j I . 2 ® § m OD � 2 § 2 § � ° y ■ - tot �■ } 44 ./ 2 § 3 § in _ 2 ® § m OD � 2 § 2 § ■ � § | �■ } ./ k\ ! � � f a ! ! 2 a 2■ «; o a =■ ■ � Since San Luis Obispo is the largest and most dominant city in a relatively sparsely 4 populated county, and is a stopping off point for travellers, it would be expected to have higher sales per capita than the rest of the county and the state. The city itself is not experiencing noticeable retail leakage, except regarding sales attributed to non -retail outlets. The county, however, does appear to experience retail leakage, with lower than average sales per capita for apparel, general merchandise, home furnishings and appliances, automobiles and supplies, and "other retail stores." Most of these items are found in regional shopping centers, and given Santa Maria's overwhelming sales per capita figures for most. of these items, it appears that Santa Maria captures a portion of San Luis Obispo county residents' expenditures. Compared to average sales per capita statewide for apparel, general merchandise; home furnishings and appliances, and "other retail stores," San Luis Obispo county appears to -be losing slightly over $600 per capita, in sales for these categories. Given a county -wide population of almost.220,000 people, this translates into $132 million in sales. Assuming $180 per square foot average retail sales for these categories, San Luis Obispo county could support another 730,000 square feet of retail space county -wide in these categories, if it were more competitive. County -wide, the population is -projected to reach 283,000 people by the year 2000, for an increase of -approximately 65,000 people. .Based on the statewide sales per capita figures, this new population should generate an additional $158 million in retail sales for apparel, general merchandise, home furnishings and appliances, and "other retail outlets." At an average sales per square foot figure of $180, this new population would generate new demand for an additional 880,000 square feet of retail space in these categories by the year 2000 within the county. The Dalidio property would not be expected to capture all of this sales potential since commercial development in these retail categories would occur in other cities in the county and other Iocations in the City of San Luis Obispo as well. Also, commercial development of this nature in the county would still have to compete with the regional centers in Santa Maria by providing at least the same quality and choice, but within closer proximity. III -14 I Retail Outlets Per Capita Table III=9 presents the number of outlets per capita by major retail category for the same jurisdictions. As shown, the City of San Luis Obispo has "a greater share of stores per capita in the following categories: apparel, drug stores, eating and drinking places, home furnishings and appliance stores, service stations, other retail outlets, and non -retail outlets. For certain retail categories, the city has relatively more outlets per capita compared to the county and the state, but comparable or lower number of outlets per capita when compared to Santa Maria. These categories include general merchandise and auto dealers and auto supplies. The city has a comparable share of building material and. farm implement outlets compared to the county and Santa Maria. While the county has lower sales per capita for general merchandise, home furnishings and appliances, and "other retail outlets," than the state as a whole, it has more stores per capita. This may indicate that, relative to the state as a whole, a higher proportion of sales in San Luis Obispo county still occur in smaller independent outlets than large chain outlets. Introducing a regional center into the market area on the Dalidio property would probably draw some sales away from existing smaller outlets in the county. Shopping Center Survey ERA surveyed selected shopping centers in the City of San Luis Obispo and in the county. As shown in Table III -10, there were six shopping centers surveyed within the city, ranging from a convenience center to a regional center. Among the two regional centers, Central Coast Plaza and Madonna Plaza, both of which are near the Dalidio property, rents ranged from $1.45 to $4.00 per square foot triple net for in-line retial space. The weighted average vacancy rate for the two regional centers is 6.3% of -the 588,000 square feet of retail space available. Most of this vacant space is in Central Coast Plaza: Table III -11 presents other larger shopping centers in San Luis Obispo County. As shown, there are no other regional shopping centers in the county. Vacancy rates among the centers surveyed ranged from 4% to 8% and rents ranged from. 70 cents to $1.35 triple net per square foot. These other larger centers can be described as larger neighborhood III -15 a c96 v v e u 0s c e B o Q, .�_ w d I Q p a = e $ g� age a s u E e w m m � a o 5 � a � � u �i • 03. v m :7 c q v 0 o b C o F < o r5 m5 <A o a Q O U p o o e e o 0 o e o e e e e < r r i r i r I ~ � p C O C O .. i� O 1= � J �v Uz I i Th i i 16 402 8 a - 8 bf i O C O G e O'6 e C O O U .] z y c96 v v e u 0s c e B o Q, .�_ w d I Q p a = e $ g� age a s u E e w m m � a o 5 � a � � u �i • 03. v m :7 c q v 0 o b C o F < o r5 m5 <A o a d L F i r� serving centers or community shopping centers. Santa Maria has the largest retail concentration in the Central Coast region at its 760,000 square foot Santa Maria Town Center, and would be the major regional competitor to a regional shopping center in San lois Obispo. The Town Center reported a 10% vacancy rate. Commercial Land Values Table III -12 presents recent commercial land sales in the city. Some of these sales were commercial properties intended for another commercial use besides a shopping center. Still, as confirmed by commercial brokers interviewed, the value for commercial land ranges from $3.41 to $8.00 per square foot, with the higher value attributed to a small 1 acre commercial parcel. Among the larger 7 to 8 acre parcels, the average price was $4.81 per square foot. There were no transaction experiences for commercial parcels approaching the size of commercial land (40 acres) identified for the Dalidio property. PLANNED AND PROPOSED PROTECTS Cities within San Luis Obispo County, and the City of Santa Maria, were surveyed regarding planned and proposed projects. Three projects that could compete with a regional shopping center on the Dalidio property were identified: a Wal-Mart in Paso Robles, an 89,000 square foot factory outlet center in Atascadero that was recently approved, and a 150,000 square foot name brand factory outlet center planned to replace the Pismo Beach Outlet in Pismo Beach. Santa Maria did not report any intentions to expand their regional shopping center. III -19 n Table I11-12 COMPARABLE COMMERCIAL LAND SALES Source: Beaver -Free Corporation, and ERA. SQUARE FOOT SITE LOCATION SALE DATE PARCEL SIZE SALE PRICE SALE PRICE Tank Farm Road 08/08189 7.4 acres $1,550.000 $4.81 Tank Farm Road 03/29/89 ., .. 7.4 acres $1,272,000 $3.9S NEC Tank Farm Road In Escrow 7.3 acres $2,250,000 $7.08 & South Higuera Street South. Higuera Street =!»188 'r ...•;' 0 acre 1348,480 38.00 & Oranada South Higuera Street 10/02/87 8.17 acres S1 :13,000 $3.41 & Hind Average: 6.25 acres 21,326,696 $SAS Source: Beaver -Free Corporation, and ERA. Section IV RESIDUAL LAND VALUE ANALYSIS This section presents the estimated ,residual land values calculated for different development scenarios. ALTERNATIVE DEVELOPMENT PROGRAMS Four different development programs were analyzed: • Development Program 1 - Existing entitlement under county zoning; • Development Program 2 - Single family residential subdivision; • Development Program 3A - 435,000 square foot retail center and multi -family housing; • Development Program 313 - 240,000 square foot retail center and multi -family housing: Development Prq&= I According to the County of San Luis Obispo Planning Department, the Dalidio ' property is zoned "residential single family" (RSF). This zoning permits a minimum parcel size of ten acres. Each parcel is allowed to have one owner -occupied home plus a 1,200 square foot secondary unit for rent. The secondary unit has to be attached to the primary unit unless the community is served by water and sewer. The property owner must put in the required road (private or public) to serve the parcel, a community water system, and a sewer system (most likely septic). The RSF zone is often applied to land adjacent to urban development and usually is intended as interim zoning until the property is annexed into an adjoining city. Most property owners subject to this zoning do not develop their property in accordance with the zoning, but, instead,, wait until the property is annexed. so that they IV -1 can develop under the city's zoning regulations, usually at higher density. Development Program 2 This scenario assumes a residential subdivision built under the City of San Luis Obispo's jurisdiction after annexation. Based on conversations with City planning staff and a review of the City's general plan and zoning, an overall density of 5 units per acre was assumed. The property owner would be required to provide water and sewer, in -tract roads and utilities, park land through the city's park dedication ordinance, and other requirements per the city's subdivision ordinances. The resultant product is 595 improved single family residential lots of 61000 to 7,000 square feet. It is assumed the property owner would sell these lots to home builders who would be responsible for building and selling homes under master plan guidelines. Development Program 3A This scenario presents the development program that has been negotiated between the City and the property.owner. Under this program, 40 acres would be re -zoned to commercial use, with the intention of building a regional shopping center. The 40 acres can accommodate approximately 435,000 square feet of retail space based on a standard floor area ratio of 25%. In addition, 12 acres would be re -zoned to allow multi -family housing. A density of .18 units per acre is assumed for the multi -family zoned land. Although the residential units could be condominiums, it was assumed that the units would be rental apartments for.:the-purpose of. this analysis. Development Program 3B This scenario is a variation of development program 3A, but, instead, assumes only 240,000 square feet of. retail development in the mid-term due to potential market constraints. The 240,000 square feet only requires 22 acres of commercial land at a 25% floor -area ratio. The balance of the commercial land available, or 18 acres, is assumed to be commercially zoned land held in an undeveloped state until market conditions improve. IV -2 ESTIMATED LAND -VALUES The residual value of the undeveloped Dalidio property was estimated for each of the development scenarios. The property's value changes depending on the net -revenue the property's development can generate; which, in turn, depends on the type and amount of development allowed. Estimated values were calculated by projecting revenue over time and subtracting operating and development costs to generate a net income stream during the period analyzed. For each scenario, estimated net income over time was discounted fiy a 14% discount rate (a blended percentage rate that represents annual return to debt <'interest> and equity <return -on -equity>) to determine the 1994 value of the income stream. The year 1994 was used as the base year since investment and construction would not begin until then. The 1994 values were then translated into 1992 values by adjusting for inflation in order to make comparisons under today's terms. Discount Rate Since the discount rate represents the blended return on debt and equity, it represents the cost of funds, inherent development risk, and development profit. For example, a discount rate of 14% reflects the following components:. Cost of funds (risk free) 7% Development Risk 4% Development Profit 3% Total 14% The blended discount rate used in the residual land value analysis was applied to pre - debt net cash flows, and reflect the weighted average between the interest -on -debt and the return -on -equity, weighted by the distribution of debt to equity invested in the project. For example: IV -3 Weight Rate Cost of funds (Debt) 609o' 10% Return to Equity 409o' 2M Blended Discount Rate 100% 14% Finding: Development Program l As shown in Table IV -I, the assumed price for a 10 acre parcel under current County zoning is $300,000 per lot. Almost twelve lots are permitted within the 119 acre Dalidio property. It is assumed that twelve lots could be sold over a four year period. After subtracting operating costs4or promotion and marketing, general administrative costs, and property taxes paid until - lots . are sold; and after subtracting capital cost such as lot improvements, in -tract costs and master infrastructure costs, the estimated cash flow ranges from a deficit of over $40,000 in 1994 to net revenue of almost $1 million in 1998 (in current year dollars not adjusted for inflation). The net present value of this cash flow in 1994 dollars, at a 14% discount rate, is $2.28 million, or approximately $19,000 per acre. The 1992 equivalent value is $2.11 million, or almost $18,000 per acre. This is the estimated value of the Dalidio property if there was no opportunity to annex into the city and obtain greater entitlements, and that the only opportunity left was to develop under the County's zoning. The actual market value of the property may be higher due to the market's anticipation that the property will be annexed. Fwdirtgs: Development Prq&am 2 Based on the review of new single family residences for sale in the market area and conversations with residential brokers, an average home retail sales price of $220,000 was assumed, as presented in Table IV -2. After subtracting development costs associated with the home, and development profit, an unimproved lot value of $54,000 per residential lot was estimated. Assuming the property owner will be selling finished lots to home builders, the cost associated with site improvements are. added back to the unimproved lot value to generate an improved lot value of $73,000, as shown in Table IV -2. I .IV -4 C 0 U a pp �py� Si8 a} pp ri W M KNOW R �0 A "D b O K � p y O. ~ Hkn in v lie w w7 0 8 o ': r- boy Gn N IYYr }LL41 ••+ H 96 w -- a- iw�p.�°aq$n CC, MSK �~ Nt�f Nv00 MMS vNi W; d O Gn N N N `••' N w VJ N tn en �1 I a pen enpapppppp py�p �e y '•, N V! V m N ve o 0 000aoon 000 r r 41, 441 •) 4m < T M N N N v ] Q fA {C. C n P-1 V-1. eZ Ch '. w 6q H C7, v Ca F Gn m 0 0 -N g O c a C > v w � Y m c m 9SZ end° s 3 U go OQ - ° N W W sN O CN (/� y�• 7.0 i+it 8a [!1 W 3 0. a, d •. N d U y •p c a o o co) CE Wa , ffiw q o o �_ t� 'T•prr,vy '� Cg -G7ly w� S Ohw Cw GoC3 ;'O V¢SG ^N y c z yy yy vSyy Cie oQ �w w ...... C-1 s Table IV -2: RESIDENTIAL 1,01 7. RICE CALCULATION HOME RETAIL SALES PRICE LESS Development Costs Site Improvements Construction (0$45/sq.ft.) Soft Costs (025% of hard costs) Sales/Marketing/G&A (010% of sales volume) Sub' -total Development Profit (012% of.sales:volume) Total Development Costs UNIMPROVED SITE VALUE ADD: SITE IMPROVEMENTS & ASSOCIATED SOFT COSTS IMPROVED SITE VALUE c Source: Economics Research Associates (nearest $1.000) $220,000 $15,000 79,000 24,000 22,000 $140,000 $ 26,000 $166,000 $54,000 $19,000 $73,000 As shown in Table N-3, based on the average lot value of $73,000 in 1992 dollars, and an absorption rate of 66 lots per year, estimated sales revenue ranges from $5.43 million in 1995 to $7S4 million in year 2003 (in current dollars not adjusted for inflation). After subtracting operating expenses and capital costs associated with providing improved lots to home builders, the period cash flow ranges from a deficit of $172,000 in 1994 to a net surplus of $3.66 million in year 2003. At a 14%discount rate, the 1994 value of this income stream is over $12.07 million, or over $101,000 per acre: The 1992 equivalent value of this income stream equals $11.16 million, or over $94,000 per acre. As shown, this estimate generally substantiates the property owner's claim that residential property equals at least $85,000 per acre. While the assumed home value of $220,000 is lower than the sales price of some new subdivision homes reported in the market area, we believe this lower value is necessary in order to absorb 66 units per year. Findings. Development Programs 3A and 3B Development program 3A includes 275,000 square feet of commercial anchors and 160,000 square feet of in-line retail shops. Triple -net rents of $0.80 per square foot for the retail anchors and $1.60 per square foot for the in-line retail stores were assumed. It is anticipated that the regional shopping center would begin operations in 1995 and that the anchors would be fully occupied in year one. The in-line retail space would lease up gradually, starting with a 70% occupancy rate and reaching a 95% occupancy rate by year 1998. The apartment units are anticipated to come on-line in 1996 and lease for an average rate of $850 gross per month, or equivalent to approximately $595 triple net. The pro forma presented in Table IV -4 looks at this development scenario from the perspective of income property. After projecting revenues from leases and subtracting operating costs, net operating income from the income property was estimated, ranging from $4.98 million in 1995 to $8.30 million in 1998: The reversion value in 1998, $89.45 million (in current dollars not adjusted for inflation) was based onthe net operating income and a 9% capitalization rate, less a broker's commission of 3%. The present value of this cash flow at a 14% discount rate is $63.71 million. The 1992 value is $58.9.1 million. This value represents the total income property's value and includes the value of construction; therefore, construction IV -7 �0 gz z n r n F YlwlO ap w M N wMp w Nepp� O O Op�� Gp e�ep f�` O N e11 ad ONp�. Opr. O� O� aD O a0 r r P N N N M M M �p N^• O. r^ N N P N S N M �ap0 r < f w M F ppp N N N 88 �p p pp 0 e� Cppp r ti e lt Vi et V i et ♦^ -t V N b 00p b r tNJ P N a♦p0 �ppO �Mm N < p� VZ pZ �O !V pPppp w N et p M r N N 1 M ay w n�p ���aPe amp ^ N p P N ��pp en P P F t V • O p Qb . w w r w w w Eap ao- ^._�. Y� eoao f ���ap0 nna n F �pp P n F� Q^ M �p1-0 O pepr p. Nn�N f f 0 yOapp MI F C •5 $;rip fns nn e a. F < C^ app F 1� SOF OP app p�� O app >L) < F< N O M w wZ N r M N M W W a ao'Ct ct � w w "I O pn b a 'O nn pet O^ 11001 N n Op &x0 Pfz f ^ a. aO t O It 1P1r11 a w n F w w .N w w upNi a0 O N p b O ry C 0 NON O• P pp.. � P ppf 01 � vFl P p a e -F F F a P1 a� rF� 0 ~ O ^ N m oTi (u O O r .0 4' N r�lo .4 e; c 1i e u 9 � S Y a C o, ,n a• rVr 8 E E � a F C 9 9 N O r O O 7 7 ww P O C ..z C C H Y 0 O LLu� m c y v• C ` V � J•QIQ �k In lu e.1 u h e> y� E N,� v u -a u u Y �'7 �nN..Z y V .7 '.1 C B '-� c 0 cj ow a � ��` '� w 3 >ai �V tai r. oN Awa �a ym �x w we:� tn z"c ocC D O 17 80 �i ¢<.O O '� Y. 0..V+ �.� Ie Qv�v m YG� z:Cgf30>�� Y ki y T CU p yu O �utR m rzy ZF. o pyn., Ct+. 'Fe 2 0 E e$ OY' c U"v v< c Ow a °`0O 4800 F E� 0 iF Y a n pd3F 6.°t.�,. O o<c �V 7y KN Iypa a y Zy Ow 5 cc a :.N^ �0 g O NW; f OC N O N Y N .O O N O n y N N O n Y r "' N N N P M f �tl Y Y) O � t� r � P •f M N 4 Y W N f P Y Y ry r Y y e n W .O N N N 1 N f `i It n MAb r W W P1` N M N M N M N r m P p Y N N N N N O N P N N P .O f O p M ct M l W Y N N r N O Cl M V C N^ M N N N N N M � n O O .W-. O O O r m.OY f n �y II f f -•-.. q^ rri n N 1Ybo W NO' P O 'AN �l N ' N W N V N ONp M N b n o n n - ••• . C a O v N O n N 0 0 O e O o O OO mm ow O r M1 n r p p r W N h N O O N O N O N n r ..Mr ! P c � F N � D N P 8 a r v Y m P O P Y C r N M M 00 O O O O O 0=0 cc M e N M M M1 P O _ O a f N C r •B B r = c °u W L a mYOf Y N n o r P H r N < e q; z H O e Y a CC C u o eoNaC � 3 WCC < m' u O a c m �n D !R •� 9 tl eYv W >° W ••C < o 3q u ww`W m. o =Y W9z y aj p °Y W i Ep L C Z t C N L C :ij t VIn ` `.S! IQ Ck. O LU ; costs must be subtracted from this value to estimate this scenario's residual land value. Table IV -5 presents a similar analysis for development program 3B, which is a smaller scale commercial development of 240,000 square feet, of which 160,000 square feet are occupied by the anchors and 80,000 square feet comprise in-line retail space. This alternative scenario is presented since there is some question about the market's ability to support a full regional center, or the ability to attract anchors and obtain financing for a larger regional center within the time period analyzed. As shown in Table IV -5, the 1994 value of the cash flow generated, under a 14% discount rate, is $40.18 million. The 1992 equivalent is $37.15 million. Again, this is the value of the total property. Construction costs must be subtracted from this amount to estimate the residual land value. Table IV -6 presents the estimated land values for scenarios 3A and 3B by taking the 1992 estimated values for both projects and subtracting development costs. As shown, the estimated residual land value of scenario 3A is $13.11 million. This is equivalent to over $110,000 per acre for the total Dalidio property. Scenario 3B generates a residual land value of $6.99 million. Since only a portion of the 40 acres zoned for commercial use is developed under scenario 313, 18 acres of commercially zoned land is held over for future commercial development. This land has commercial value even if it is held for an alternative or future commercial use. Based on recent transactions for commercial land in the city of San Luis Obispo, a value of $5 per square foot was assigned for the 18 acres of commercial acreage left over. Adding the value of the undeveloped commercial land, at $3.92 million (in 1992 dollars), generates a total residual land value under scenario 3B of $10.91 million dollars, or almost $92,000 per acre over the 119 acre Dalidio property. COMPARISON OF THE DEVELOPMENT SCENARIOS Table IV -7 presents a summary of the residual land value estimates for the total 119 acre Dalidio property under the four scenarios analyzed, before taking into account interchange development costs that may be required. It is clear that the value of the land is enhanced substantially through annexation and rezoning under the city's jurisdiction. IV -10 p N N + O O O O O O N O H O n n tN b n P P a a ^ O N O O O O O n tl F b n O O N N N tl'b Y M1 r O N N1 tl 1•� N rN P NN a 'O SON MI p. V1NC a0 O N N M N n N + O N N O N b N tl O P N b-tl b tl h M r N ClO N N w N w N N w n N tl a n cc o 000 a + ebb mo 42b + + P 'b 0 tl O'0 0 b N r N b N F P P a �. � b OO+ r1M1r M1 tl rn+ w A NeoNm 0 MFM MM M b N ^it y"N= P P � en r Y1 N r r N N M w M N z r H Q p M 1 b A I O O ^ ==a O r O tl tl + N N N P a a r N r N O O ON b^ tl n b -t M n A N =WW - P O P O ne.1 (PV P Or MM N ^b C4 OO + bM1 OAn O O wi r 114 + v i4 p 9 N C yl N O n N 00 O O O O O O+ O O V +- Q P WN N 0 0 0 0 0 $ b b N b b P N O O h ^ O O O O N N n M M N M1 O YI h h O= �' - .-. N tl N b NnN •�+b C b r M n M O N >Ow CS a F x <+ tl tl N N O O O O O O O coo h N =00 eN N W P O A ^ O M N M cc Y. F. z m P P N 0 0 O 0 0 0 O MOM 96c N, 000 N N O P W P r i N N M1 = J w m 4 m N N >0+ C. G B 8 to > p O 96 Wme n V C m 0 0 O O b O NY O r P w 0 J F P> M Y tK ^ 3 Y c C sY'Z Z O e �e �. y ,� '� c a < Fec X ...@ y p = a Y 9 < o e :. `u, w o F O 'm e m z O !R n _ o @ a < a 9 Y c Z 8 r�i e.Wd J �. �C .7 yr :aX F' W u E o.e W0 U3 W m co �'+ u u' ' . m z N c u O i 41 7 Yfa a 96 °C°c °e a e—Y W z•,> ° J �c a a °' o _ .. 9104 ZW OY Wou.� oeJ > Wu'ez O .�sc y ac y.Za�� Wcun W m� �:. U W >w u. m n Y C= s Q 96 C Z V a .a. 9° y C C H .� 7 C= �� pC. X m < z C 07 ` <O c•� E.� :< E mN <� Ez}<r a vz<O.Y y _ WS. ,e,�,W v a Z'� � m � a >. v a UOC Y� CF , �U�� 6 > 8 <QO� vy ZnC1 N O eQ O� d �° a.^�.9=w < J^.^_ az 9 y.93= wW.9 .3fi f9 Ze m "a e p = e °u ,, u. 0 Zee 6 W! e e '9 0< e e° a: e e° .9 .J Z r ° e O F- W `� p N c v X Y Y z Y Y i Y 4 e O y Y Y Y Y° U Y a.I Iy < O V J p9 O_ 0. 0 00.2 Y O > u 8 B Ido C< z fi B c0 B 8 '': m V B 8 9 Y `" B 8 0 '� <°'tail o <F d N O 1•+ BpG e.e U U<$ < W U U ? W U U A C4 � U U F C; W U U h cc O y 0 o. 0� O fall x Z� 7 a e <_O o. U `e u> O- J !-� W O t-1 > q < � m . = ZD. °C Q mLU O ur WW< Table IV -6: RESIDUAL LAND VALUE - PROGRAMS 3A & 3B Run Date: October 27, 1992 1992 ESTIMATED CONSTRUCTION & LAND VALUE (3) LESS DEVELOPMENT COSTS: Commercial Development Site Work Direct Construction In-line Tenent.Improvernents In -direct Costs(4) Developer Profit Contingency Sub -total Commercial Development Rental Apartments Development(5) TOTAL DEVELOPMENT COSTS ESTIMATED RESIDUAL LAND VALUE Plus: Undeveloped Commercial Land Value(6) UNIT COSTS - SCENARIO 3A(1) SCENARIO 313(2) $2/sq.ft. Anchors @ $50/sq.ft. In-line @ $40/sq.ft. $5/sq.ft. 24% of Costs 10% of Costs 5% of Costs $50,000/unit $58,906,841 $37,150,511 $3,484,800 $1,920,000 13,750,000 8,000,006 6,400,000 3,200,000 800,000 400,000 5,864,352 3,244,800 3,029,915 1,676,480 1,666,453 922,664, $34,995,521 _ $19163,344 $10,800,000 $45,795,521 $10,800,000 $30;163,344 $13,111;320 $6,987,167 0 3,920,400 TOTAL RESIDUAL LAND VALUE $13,111,320 $10,907,567 Per 119 Acres $110,179 $91,660 (1) 435,000 sq.ft. retail (275,000 sq.ft. anchors) on 40 acres & 216 apartment units on 12'acres. (2) 240,000 sq.ft. retail (160,000 sq.ft. anchors) on 22 acres, 18 acres undeveloped commercial land, & 216 apartment units on 12 acres. (3) Net Present Value at 16% discount rate. See tables IV -5 & IV -6. (4) Includes A&E, construction financing, models, construction interest, permits & fees, and other miscellaneous costs. (5) Turn -key project. (6)18 acres under scenario 3B. Source: Economics Research Associates Table IV -7: COMPARISON OF ESTIMATED 1992 RESIDUAL LAND VALUES PER ACRE(1) PRIOR TO INTERCHANGE COST ALLOCATION Value Per-Acre(2) DEVELOPMENT PROGRAM 1: Eidsting Entitlement Under County Zoning 2: Single -Family Residential Subdivision 3A: 435,000 Square Foot Retail Center & MF Housing 3B: 240,000 Square Foot Retail Center & MF Housing COMPARISONS SCENARIO 2 - SCENARIO 3A SCENARIO 2 - SCENARIO 3B SCENARIO 2 - SCENARIO 1 SCENARIO 3A - SCENARIO 1 SCENARIO 313 - SCENARIO 1 (1) Per 119 acres. (2) At a 14% discount rate. Source: Economics Research Associates $17,724 $93,749 $110,179 $91;660 ($16,430) $2.089 $76,025 $92,455 $73,936 It is important to note that the different values among the scenarios are only accurate approximations if the entitlements under each scenario are realistic. If it is unlikely that the residential subdivision scenario would.receive government approval and the needed zoning, then the estimated value under that scenario does not provide. a realistic basis for comparison. Impacts of the Interchange Another critical factor that will affect the land values for the different scenarios is how much of the freeway interchange cost must be borne by the Dalidio property owner.. Both the residential development scenario and the commercial development scenarios will generate additional traffic, but the amount of traffic that each generates and their peaking characteristics will differ, resulting in different cost allocations for each scenario. The estimated interchange cost is $10 million, of which $4 million is estimated right- of-way land acquisition costs and $6 million is construction costs. According to the City of San Luis Obispo staff, Dalidio's commercial development would generate approximately 54 percent of the traffic demand which the interchange is intended to accommodate. Based on this allocation, the developer of the Dalidio property under the commercial development scenarios would be responsible for $5.4 million of the $10 million interchange cost. However, approximately 50 percent of the designated right-of-way is on the Dalidio's property and would have to be purchased if it is not dedicated. Dedication or sale of right - of; -way located on the Dalidio property would not diminish the Dalidio property's entitlements. Assuming the developer/owner of the Dalidio property would get a credit for the right-of-way dedicated (an estimated $2 million credit), the net cash cost assigned to the Dalidio property for the interchange is $3.4 million instead of $5.4 million, as shown in Table IV -8. This net cash out cost, which is a development cost, would have to be subtracted from the base residual land value presented earlier to estimate the net residual land value of the property. If financed, the present value of this cost could be less, depending on the discount rate used. According to City staff, the Dalidio property is designated for urban -level residential development in the general plan, yet, the interchange is not designated in the City's IV -14 transportation elerrient. This implies that the interchange may not be required under the residential development scenario, and, thus, no associated interchange costs would be incurred under scenario 2. Table IV -8 presents how the net residual land value estimates differ under the three scenarios after taking into account the Dalidio property's share of the interchange cost. As shown, since. there is no cost assignment under scenario 2, the per acre net residual land value remains -the same at $11.2 million, or over $94,000 per acre (based on 119 acres). Under scenario 3A, the net residual value of the property drops to $9.7 million, or $82,000 per acre. Under scenario 3B, the net residual value of the property falls to $7.5 million, or over $63,000 per acre. Value of Agricultural Land Another consideration is the use of the 67 acres of open space land under the commercial scenarios. Since the City intends to keep the 67 acres in agricultural production, another approach would be to simply zone the 67 acres for agricultural use and negotiate a deed restriction which limits the use of the 67 acres to agricultural production in perpetuity when the total 119 acre parcel is subdivided. The land could be held privately either by the existing property owner or someone else (including the City) to whom the existing property owner could sell the property for agricultural use. Assuming a value of $10,000 per acre for prime agricultural land without any development potential, the 67 acres J would be worth an additional $670,000 to the existing property owner under the commercial development scenarios. Summary Comparison Table IV -9 presents a summary of the estimated residual land values for the different development programs, before and after allocating interchange costs and providing credit for the agricultural land value if the property owner were to retain the 67 acres of open space in agricultural production. As shown, the values of scenarios 1 and 2 do not change since they do not incur any interchange costs, nor retain 67 acres of open space. The residual values of scenarios 3A and 3B, however, are reduced significantly after allocating IV -15 Table IV -8: IMPACT OF INTERCI[Ai,. E COSTS BASE LAND VALUE(1) Per Acre(2) Less: INTERCHANGE COST ASSIGNED TO PROPERTY Total Interchange Cost = Land Right -of -Way $4,000,000 Improvements 6,000,000 Totnl $10,000,000 Percent Cost Assigned(3) Total Cost Assigned Lets: Rightof-Way Credit Net Cost Assigned Equals: NET LAND VALUE (1) At n 14% discount rate. (2) Bascd on 119 acres. (3) Per City of San Luis Obispo Source: Economics Research Associates I� TOTAL COST Scenario 2 Scenario 3A Scenario 313 $11,156,168 $13,11020 $10,907,567 $93,749 $110,179 $91,660 0% 54% 54% $0 $5,400,000 $5,400,000 $0 $2,000.000 $2,000,000 so $3,400,000 $3,400,000 { u Vi e Q r V ` N a m > qq gg 9Q Q ^y w w w w N u � � r n > N N N N N N 0 F ` Q W � U O W U O O a> ° a a 0 a� d O O U U OO O C7¢� U a OU a a� Q O O <0 � S Z 7 2 0 7a x S p _ W r IL Q' Z a o 0 o g o ar a 8 8 as .008 8 d 9 8 8 Z z z z z `� U. v e v `` e v v h v J jr QJ 9 ��j O O O O O O e tz 4 25 �Oj c !r' 25 2S �Oj a !s' 25 2S G • m M �++ m M O �+ m n °' g� W W W N m U y y N N N interchange costs, and increase modestly after leaving the 67 acres of open space land in private agricultural use. Relative to scenario 1, the existing entitlement scenario, all of the other scenarios generate significantly more value. Therefore, any development program other than the existing entitlements under the County's zoning benefits the property owner. Scenario 2, the residential subdivision scenario, generates the highest value. Compared to the commercial development scenarios, 3A and 313, the residential scenario generates $0.8 million to $3.0 million more in value, or equivalent to $6,500 to $25,000 per acre over the 119 acre property, or $11,500 to $44,500 per acre if applied to the 67 acres of open space. The primary reason the residential subdivision scenario generates higher land value is that.it may not require the developer to incur any interchange development costs. This difference in value could be diminished by increasing entitlements under the commercial scenarios. A key issue is what, if any, compensation is due the property owner to equate the value of the residential subdivision development scenario and the commercial development scenarios for the property owner? It is questionable whether the property owner needs to be compensated at all since the commercial development scenarios would still enhance the land's value, and would still provide incentive for the property owner to develop the commercial scenario. IV -18 Section V FISCAL IMPACT ANALYSIS This section presents a comparison of the. estimated fiscal impacts of the residential subdivision development program, scenario 2, and the commercial development programs, scnearios 3A and 3B, have on the City of San Luis Obispo's general fund. FISCAL IMPACT METHODOLOGY Revenue Three general categories of fiscal revenue were projected for each scenario. First, property tax revenue was projected based on the estimated assessed value of the development, inflated each year by 2% per Proposition 13 guidelines. In the case of development program 2, the residential subdivision. scenario, property, values included both lot sales during the year (which occur one, year before development), and the cumulative value of home sales until the development is fully absorbed.. In each scenario, the assessed value of the agricultural land that had not yet been sold or developed was also added. It was assumed that the City received 18% of: the property tax revenue generated. Sales tax revenue was also projected based on the amount of occupied retail space programmed and average sales per square foot factors. Presumably, the leasing policy of the retail center developed under either development program 3A or 3B would be to-. provide retail outlets that filled a market void and complemented rather than duplicated the retail offerings already available in the city. The retail targeting strategy would intend to compete with the Santa Maria regional outlets and both intercept San Luis Obispo county residents who currently go to Santa Maria, and attract residents from Santa Maria to San Luis Obispo. As discussed in Section III of this report; there appears to be a retail opportunity given that sales per capita county -wide is lower than average for several retail categories. However, since retail sales per capita for these same categories are already higher than average within the city of San Luis Obispo, it would be unrealistic to expect that all sales attributed to the new center would be an incremental gain to the City. Therefore, it was assumed that 70% of the retail sales in scenario 3A and 85% of the sales in scenario V-1 3B would be an.incremental gain to the City. The balance is considered sales that otherwise would have gone to other city retailers. Other general fund revenue was estimated, such as franchise tax, utility users tax, fines & forfeitures, investments, subventions, selected service charges, real property transfer tax revenue, business tax, and other revenue. Unless otherwise stated in the fiscal pro - formas, these revenues were projected based on the existing fiscal year 1991-92 budget for each revenue .source, divided by "Equivalent Dwelling Unit" (EDU) in the city to generate an amount per EDU factor for each revenue item. These factors were multiplied by the estimated EDUs each development scenario generates. An EDU is defined as <households>. -plus- <employment in the .city divided by average household size times 40%>. The EDU unit of measure addresses the fact that municipal services serve residential, commercial and industrial properties, and facilitates projecting the impact of mixed-use development scenarios. The 40% adjustment is to account for the relatively fewer hours a person spends in the _city while working versus the hours spent in the city as a resident. The resultant ratio of public service costs allocated. to residential development versus commercial development is 80 percent to 20 percent, respectively. This ratio is roughly in line with the residential versus commercial ratio of public safety calls in the city. In some cases where the revenue 'source is strictly associated with residents (such as subventions), property values (such as real estate transfer tax), or business revenue (such as the business tax), the appropriate unit of measurewas used instead of EDUs. Expenses _ General fund expenses were projected using factors based on the fiscal year 1991-92 program budget for the city divided by citywide EDUs. These program categories included public safety (fire and police); public utilities; transportation; leisure, cultural and social services; community development; and general government. Only the general fund budget for these categories was used to develop the cost factors. Costs supported by enterprise funds and development and permit fees were not included since the earned revenue associated with these costs were not .projected on the revenue side of the analysis. This exclusion does not affect the net fiscal impact estimate since fees and their associated costs V-2 balance each other out. These cost factors were applied to the estimated EDTJs each development scenario generates. FINDINGS Development Program 2 The residential subdivision scenario generates fiscal revenue totalling almost $385,000 per year by build -out in year 2004 (in 1992 dollars adjusted for inflation), as shown in Table. V-1. Most of the revenue is generated by property taxes. As shown in Table V-2, after deducting fiscal expenditures, a net fiscal surplus of $68,000 is generated (in 1992 dollars).. Development Program 3A The 435,000 square foot retail center and multi -family housing development scenario generates estimated fiscal revenue of $643,000 in year 2004 (in 1992 dollars), as shown in Table V-3. Most of this revenue is from sales tax receipts. As shown in Table V-4, the net fiscal surplus after expenditures is $406,000 (in 1992 dollars). Development Program 3B The 240,000 square foot retail center and multi -family housing development scenario generates fiscal revenue of $445,000 in year 2004 (in 1992 dollars), as shown in Table V-5. Again, most of the fiscal revenue comes from sales tax revenues. After subtracting fiscal expenses, a net fiscal gain of $263,000 is generated (in 1992 dollars), as shown in Table V-6. Summary All of the development scenarios generate a fiscal surplus for the City. The commercial development scenarios generate substantially more revenue than the residential subdivision scenario, primarily because they generate sales tax revenue and their associated fiscal costs are less. The net fiscal surplus under the commercial development scenarios by the year 2004, (when the residential development program is built=out), is $195,000 to $338,000 more per year (in 1992 dollars). Since the commercial developments are absorbed earlier than the single-family residential development, they also generate fiscal revenue sooner. V-3 09-1210 x ea8�� 8 8" owsip p s 8 $-' eNB�� 8 i 3ay ,,� ns M-'p m R P N NNr tiR�NEDNN � N lnEii�s��g�` �ne�tlpN� sa^ss�-a M 0 0 0 0 OO O C 2e000.OeOG o. i K d F oC U A e� a a aaa y�d a g�j � cam: I hFidU O�Fa u ,71 18 V �a 9 V N O O n o a loom oom u }a.:; g g A N Rn fd Sd . ~ a� M M y �l M p rt r r n N N M N N N 33iJ dS�eNun Z'�ry:° M N M q� s a 8 �� Mal RZ N. 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I a a°°D°o°Dc » S I a I Fr tt»«a=3x�$ O gE $ a w° i c o ¢Gk Q w� j j 1. o ¢ a S V S Z Z cc OZ W < B E $ > Q >° e o W W e a n E y < :S E p S o@ J O pp x m f� T ` a a ,. < a m 3 m ~ F O= m a J E> �t 8 S m a _a� p S a E a _ ygz $ g__pg�gjap aa 8 m ' W a~_$g E q W L0! gf i z �J3 w Lg35 n bl U < S�Mi 6 E a o a O a N ri O E ".SaY $9lmC",�mr A R �9Rm�F;m' F N m � e 0 r C tPl a t39!"=F3m' F aaN�amr F OT in $. o to - a pg $g Qo m a a a o 0 0 0 0 0 o c I a a°°D°o°Dc » S I a I Fr tt»«a=3x�$ O gE $ a w° i c o ¢Gk Q w� j j 1. o ¢ a S V S Z Z cc OZ W < B E $ > Q >° e o W W e a n E y < :S E p S o@ J O pp x m f� T ` a a ,. < a m 3 m ~ F O= m a J E> �t 8 S m a _a� p S a E a _ ygz $ g__pg�gjap aa 8 m ' W a~_$g E q W L0! gf i z �J3 w Lg35 n bl U < S�Mi 6 E a o a O a N ri O E ".SaY § 2 « §■��#! # � & ■a:= B § 2 | §■§|E! i a ■■f° d 2 2 K 10, We©|£ % , 9 l � �■���! k § 2 ■ ||■■#; ; 0. § # kkN 9 2 § �■��k% k e ■■me t� 2 " 2�| |■■■�_ - _ \\g !`k4s } § i�A ¥■§k$k " ■,■■ 2 § � §.E %!memo ii .| ■■;■ 7 | APPENDIX A GENERAL LIMITING CONDITIONS GENERAL LIMITING CONDITIONS Every reasonable effort has been made to ensure that the data contained in this study reflect. the most accurate and timely infor- mation possible, and they are believed to be reliable. This study is based on estimates, assumptions and other information devel- oped by Economics Research Associates from its independent _ research effort, general knowledge of the industry and consulta- tions with the client and the client's representatives. No responsi= bility is assumed for inaccuracies in reporting by the client, the client's agent and representatives or any other data source used in preparing or presenting this study. This report is based on information that was current as of August 1992 and Economics Research Associates has not undertaken any update of its research effort since such date. No warranty or representation is made by Economics Research Associates that any of the projected values or results contained in this study will actually be achieved. Possession of thisstudy does not carry with it the right of publica- tion thereof or to use the name of "Economics Research Associ- ates" in any manner without first obtaining the prior written con- sent of Economics Research Associates. No abstracting, excerpt- ing or summarization of this study may be made without first ob- taining the prior written consent of Economics Research Associ- ates. This report is not to be used in conjunction with any public_ or private offering of securities or other similar purpose where it may be relied upon to any degree by any person other than the client without first obtaining the prior written consent of Econorn- ics Research Associates. This study may not be used for purposes other than that for which it is prepared or for which prior written consent has first been obtained from Economics Research Associ- ates. This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations. 1.. .. DATE (MM/DD/VY) .. . 1� ..:...... 09/05/96 .:..i- PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Dealer, Renton dr Associates 575 Anton Boulevard, Suite 530 HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE Costa Mesa CA 92626 COMPANY A Evanston Insurance Co. INSURED COMPANY Economics Research Associates B COMPANY C 10990 Wilshire Bhrd., JN600 Los Angeles CA 90024 COMPANY D IxTHIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE FOLi ES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, ENCLUSIONS AND CONOITIONS OF SU H POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MMTDDNY) POLICY EXPIRATION DATE (MMrDDA-Y) LIMITS GENERAL LIABILITY GENERAL AGGREGATE $ PRODUCTS - COMPIOP AGG $ COMMERCIAL GENERAL LIABILITY CLAIMS MADE F—I OCCUR PERSONAL & ADV INJURY $ EACH OCCURRENCE $ OWNER'S & CONTRACTORS PROT FIRE DAMAGE (Any one fire) $ MED EXP (Any oneperson) $ AUTOMOBILE LIABILITY COMBINED SINGLE LIMB $ ANY AUTO BODILY INJURY $ (Per person) ALL OWNED AUTOS SCHEDULED AUTOS L, L BODILY INJURY $ (Per axkenq HIRED AUTOS NON -OWNED AUTOS p r tJ •:1. PROPERTY DAMAGE $ GARAGE LIABILITY ' - r7,C AUTO ONLY - EA ACCIDENT $ OTHER THAN AUTO ONLY: .-- ANY AUTO ^ $ EXCESS LIABILITY EACH OCCURRENCE $ AGGREGATE $ UMBRELLA FORM OTHER THAN UMBRELLA FORM WORKERS COMPENSATION AND WC STAIU- I DTH - EMPLOYERS' LIABILITY EL EACH ACCIDENT $ EL DISEASE - POLICY LIMIT $ THE PROPRIETOR/ INCL PARTNERSEXECUTIVE EL DISEASE - EA EMPLOYEE $ OFFICERS ARE: EXCL OTHER A Professional Liability TBD 09/03/96 09/03/97 PER CLAIM/AGGREGATE 1,000,000 DEDUCTIBLE PER CLAIM 75,000 2ESCRIPnON OF OPERATIONS/LOCATIDNSNEHICLES/SPECIAL ITEMS TEN DAY NOTICE IN THE EVENT OF NONPAYMENT OF PREMIUM. CERT1FiCATE:IiOLDR:....i ......... .............. CAN�LU1i ...> SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE CITY OF SAN LUIS OBISPO EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ATTN: PAY VOOES 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, 990 PALM STREET SAN LUIS OBISPO CA 83403$100 BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, rrS AG Mv AUTHORD'FD REPRESENTATIVE S. Oradias o/ ORA In AssocInc. aAECAkS><> IIIA: tSH: i r-. C� CROWELL INSURANCE AGENCY A DIVISION OF AOV 43 CORPORATE PARK, SUITE 200 IRVINE CA 92714 ....................................................................................... INSURED Economies Research Associates 10990 W11sh►rs Brod., #1600 Los Angeles CA 90024 16 z- 10/10/95 CONFERS NO RIGHTS UPON THE CEIMFICATE HOLDER. THUS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANY LETTER A ................................. COMPANY ........................ LET16t :.................................. B COMPANY LEITER C ................................. COMPANY LETTER D :...................... COMPANY TETTER ..... ....... E COMPANIES AFFORDING COVERAGE Evanston Insurance Co. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. TYPE of INSURANCE GENERAL LIABILITY ...... COMMERCIAL GENERAL LIABILITY CLAIMS MADE : OCCUR OWNERS 6 CONTRACTORS PROT. EXCESS LIABILITY ........ UMBRELLA FORM POLICY NUMBER POLICY EFFECTIVE :POLICY EXPRATION Lam S DATE ( MWM DATE (AMANDDNn :................................................ S ............................................... .:................................ .................................. GENERAL AGGREGATE ................................... :S ..........................................:................................... ....PRODUCTS CCMP/0P AGO. ............. .............. .............................................. :s PERSONAL 6 ADV. INAURY E$ EACH occuRrRE,TE ss ................................................:.................................. FIRE DAMAGE (Any are fire) ES ............................................................................. . NED. T70E34SE (Any one Person)[$ COMBINED SINGLE S LIMrT S ...................................................................................... BODILY NAM .. ............:..:........:... (Per person) :$ BODILY NAM i$ :...................................... (Per eealda" ................................................ :s ...................................... PROPERTY DAMAGE :S EACH OCCURRENCE S ................................................:...................................... :AGGREGATE E$ ...... ........................ ..... STATUTORY LIMITS .. ............:..:........:... EACH ACCIDENT :....................................... S :...................................... ......... ' DISEASE - POLICY LIMIT ........................ i$ :...................................... ........................ DISEASE - EACH EAPLOYEE ............................................. :.......................... ....... :.................................................................................. :$ ;...................................... .......................................................................................................................... DESORPTION OF OPERATIONSA.00ATCNSN@IICLESISPEM ITEMS *TEN DAY NOTICE IN THE EVENT OF NONPAYMENT OF PREMIUM. RECEIVED CITY CLERK CRY OF SAN LUIS OBISPOAN LUIS OBISPO, CA ATTN: PAY VOOES 990 PALM STREET SAN LUIS OBISPO CA 934039100 08/03195 09/00/99 PER CLAIM AND 1000000 ANNUAL AGGREGATE 1000000 ................... ....... ................ ....................................... ...:.................................... ................................... ............... SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE D(PIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR UABIUTY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. S. Gradlas i i • s I�_;& ISSUE.DATE.(MM/DONY) CERTIFICA ► OF INSURANCE _ 1 4 PRODUCER THIS CERTIFICAT IS ISSUED _AS A MATTER OF A O_ _ The Crowell Insurance Agency CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE 9 y DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE P. 0. Box 19501 POLICIES BELOW. COMPANIES AFFORDING COVERAGE 43 Corporate Park, Suite 200 Irvine, CA 92713-9501 COMPANY LETTER- A p��a �® R E EL _.._ -C -E F. COMPANY LETTER B -•--- ----' JUl-1-�-1994---- INSURED COMPANY C Economics Research Associates CITY -CLERK ---- 10990 Wilshire Blvd., #1600 COMPANY 51 ^. ,: LU 1 S 081SP0, C.A D Los Angeles CA 90024 LETTER COMPAN LETTER Evanston Insurance Com an COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. col 1I POLICY EFFECTIVE POLICY EXPIRATION. LTR TYPE OF INSURANCE POLICY NUMBER I DATE(MM/D0/YV) DATE(MM/DD/YY) LIMITS III' GENERAL LIABILITY I I GENERAL AGGREGATE :$ COMMERCIAL GENERAL LIABILITY, I PRODU~—CTS•COMPIOP AGG. $ V CLAIMS MADE OCCUR, _ i I PERSONAL 8 ADV. INJURY I $ OWNER'S & CONTRACTOR'S PROT.. I j EACH OCCURRENCE $ i1 FIRE DAMAGE (Any one fire) $ 1 I I MED. EXPENSE (Any one person) $ AUTOMOBILE LIABILITY 1 COMBINED SINGLE $ ANY AUTO LIMIT ALL OWNED AUTOS I BODILY INJURY r� SCHEDULED AUTOS I i I (Per person) $ HIRED AUTOS I BODILY INJURY NOWOWNED AUTOS i ! (Per accident) $ GARAGE LIABILITY I PROPERTY DAMAGE i $ r EXCESS LIABILITY I I ! EACH OCCURRENCE $— UMBRELLA FORM i AGGREGATE I $ OTHER THAN UMBRELLA FORM — `—I WORKER'S COMPENSATION STATUTORY LIMITS — EACH ACCIDENT $ AND I ��DISEASE—POLICY LIMIT $ EMPLOYERS' LIABILITY i� SEASE—---- --...— DIEACH EMPLOYEE $ E I OTHER iTBD/PL j 7/01 /94 7/01/95 PROFESSIONAL ( j $1,000,000 EACH LIABILITY I( I CLAIM & AGGREGATE DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS - *TEN DAYS NOTICE IN THE EVENT OF NONPAYMENT. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF; THE ISSUING COMPANY WILL ENDEAVOR TO CITY OF SAN LUIS DBI SPO 30 ATTN: PAM VOGES MAIL DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR 990 PALM STREET LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. SAN LUIS OBISPO, CA 93403-8100 AUTHORIZED R RESENTATIVE C. u _ � ,n , _^ ®ACORD CORPORATION 1990 ACORD 25-57/90 � ) 't– 1c uroweli ins. Agency MIM N,�•✓ISSUE DATE (MM/DD/YY) Ac4li:��. CERTIFICArOF INSURANCE - F 6/28/93 ----------- PRODUCER THIS CERTIFICATE IS ISSUED :AS A MATTER OF INFORMATION ONLY AND The Crowell Insurance Agency CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE P. 0. Dox 19501 POLICIES BELOW. I COMPANIES AFFORDING COVERAGE 43 Corporate Park, Suite 200 Irvine, CA 42713-9501 COMPANY A LETTER COMPANY LETTER INSURED COMPANY— C Economics Research Associates LETTER COMPANYD I 10990 Wilshire Blvd., #1600 Los Angeles CA 90024 LETTER It --COMPANY E LETTER Evanston Insurance Company _COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE.INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ! 1 POLICY_ EFFECTIVE 'POLICY EXPIRATION CO TYPE OF INSURANCE POLICY NUMBER LTR + DATE (MM/DD/YY) ' I LIMITS I DATE (MM/DD/YY) j GGEEN-ERAL. LIABILITY I GENERAL AGGREGATE $ ' f COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP/OP AGG. $ r— � CLAIMS MADE OCCUR. t PERSONAL 8 ADV. INJURY $ LJI OWNER'S & CONTRACTOR'S PROTI I ! I EACH OCCURRENCE 1 $ i 111 �• FIRE DAMAGE (Any one fire) $ MEAD. EXPENSE (Any one person), $ AUTOMOBILE.LIABILITY ( I I I COMBINED SINGLE ' $ r� ANY AUTO LIMIT ALL OWNED AUTOS F ! BODILY INJURY -- SCHEDULED AUTOS (Per person) $ HIRED AUTOS I I I BODILY INJURY $ ' NON -OWNED AUTOS I I (Per accident) GARAGE LIABILITY i9 R F� E IV F 1). j PROPERTY DAMAGE. I$ i � 1 EXCESS LIABILITY I --_—, I EACH OCCURRENCE I $ l` J U L - 2 1993 UMBRELLA FORM I AGGREGATE ! $ OTHER THAN UMBRELLA FORM, - ILA I•--! 'STATUTORY LIMITS WORKER'S COMPENSATION 5AN LUIS OBISPO, CA EACH ACCIDENT $ AND DISEASE—POLICY LIMIT $ EMPLOYERS' LIABILITY --- DISEASE—EACH EMPLOYEE' $ E OTHER IBJ101727 7/01/93 7/01/94 PROFESSIONAL i I $1,000,000 EACH LIABILITY I CLAIM & AGGREGATE DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS *except if cancelled for non—payment of premium, 10 days notice given. CERTIFICATE HOLDER CANCELLATION I SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL krylQ{�4xI$�a+ CITY OF SAN LUIS OB I SPO 30 MAIL DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE Attn: Pam Voges LEFT, Cpl DCRd(UfUtA�(Ti(1CAaUCJt9YiaTNa IX9�C t}k}G�j(7lgr fpjdpll�lx�l 990 Palm Street LUI�17nYX�RXtAOXJ�Xl4aTkJ21@DAR9JAdCkT16kAtA9cS3[RCt9fl�ld&�kTX>dfks• San Luis Obispo, CA 93403-8100 AUTHORIZED REPRESENTATIVE 11hAgency ACORD 25-S (7/90) CACORD CORPORATION 1990 4— 10 Iona Browne -DALI O - DEVELOP E P A APPUC.kl ION . FOR AMNM,V:rJON, F-kE-ZON!NG AND-DEYELOPl'.t EPIff PLAN' IN TFC CITY .OF SAh LLZS OBI SPO A.�PLTCAN'fS THE DAlff O PAT-%I!Uj( TROJAIN EN'i'ERMISES MPR ERRIAM PLANNING ASSO AMS + UI:'OL,'4II3� ::. 199.3 Table of Contents DALIDIO DEVELOPMENT PLAN I. INTRODUCTION AND BACKGROUND: A. Introduction. B. Objectives and Summary of Proposals C. Potential Phasing and Prbiect schedule D. Background Information E. Summary of Consistency with General Plan Update and City Policies II. OPEN SPACE AND RESIDENTIAL USES A. Introduction B. Residential and Open Space Proposals 1. Proposals 2. Site Plan C. Special Conditions and Considerations III. COMMERCIAL USES A. Introduction B. Commercial Development 1. Proposals 2. Site Plan C. Special Conditions and Considerations IV. OTHER CONSIDERATIONS A. Utility Considerations B. Grading and Drainage i Maps'' and Figures DALIDIO DEVELOPMENT PLAN Map 1.1 Area Location: Safi Luis Obispo Map 1.2 Adjacent Land Uses and Zoning Map 1.3 Proposed Land Uses by Area Map 1.4 Zoning Designations Recluested. Map 2.1 Existing Conditions, Residential Parcel Map 2.2 Residential Development Constraints Map 3.1 ComfnerdalbdVelppment Site PI I an Map 3.2 Major Circulation Concepts Pig 3.1 Commercial Elevations from Freeway 101 Fig 3.2 Road Crossections Proposed Map 4.1 Diagrammatic Sewer Plan Map 4.2 Diagrut4rhatic Water Supply Plan Map 4.3 Diagrammatic Drainage Plan Map 4.4 Major Circulation Concepts 1 _ o I I I I I I I I 7 1 APPENDICES Appendix A: Application and supporting technical information Appendix A-1. Application , Appendix A-2 Legal Description Appendix A-3 Proposed General Plan and Zoning Amendment Appendix A4. Proposed Development Agreement -greement Appendix B: Planning and Environmental Background Appendix B-1. Agricultural Background Appendix B-2. Archeological Information Appendix 13-3. Drainage and Geological information Appendix 13-4. Economic Inforrhation Appendix B-5 Traffic Report and Information ' Appendix B-6. Visual Analysis Misc. Information Appendix 9-1 Water Consumption /Availability I I I I I I I 7 1 I I 11 1 1 I J I 1 SECTION I INTRODUCTION AND BACKGROUND A. INTRODUCTION The Dalidio Development Plan is a comprehensive long-range plan for the development of the property located in the southwest unincorporated section adjacent to the City of San Luis Obispo (see Map 1. 1), and calls for open space, commercial and residential uses. The planning area represents one of the last remaining large, vacant properties designated by both the City and County as appropriate for expansion of the City. The planning area, composed of roughly 131 acres, is bounded by Madonna and Central Coast Plazas to the northeast, Madonna Road to the northwest, a common boundary with the McBride and Madonna properties to the southwest and Highway 101 to the southeast. The land is almost totally surrounded by the City - 80% of perimeter. See Map 1.2. Development Plan Requirement This Development Plan is being submitted following the City Council policy, adopted on August 12, 1993 allowing plans to be processed which are in conformity with the proposed General Plan update now being processed by the City of San Luis Obispo. Further, on November 3, 1993, the City Council directed the planning staff to begin processing an amendment to the current General Plan (1977) which will delete the Dalidio land as a major annexation area. This was done in recognition of the major open space commitment by the Dalidios of a minimum of 60 acres of open space and park land located on the southwest boundary adjacent to the McBride and Madonna parcels. Report Organization Major Development Plan proposals are summarized in Section I as are the plan objectives and a brief planning background. Section II sets forth the uses and conditions proposed for the land retained under the Dalidio ownership and not optioned to the Bird's for commercial purposes. The land retained under the Dalidio ownership will either be in open space or held for future residential development. Since there are no current developers involved with this area, the development proposals are general in nature and contain conditions for more detailed approvals at a future date.. I I 1 I� u n J I I i J I Red' Station (KSgy^TV) �. `n+ a lrc•• / `t - an: _ 's: ispo ;.- .� I :J /-j•�/� 'hiss es // _�'�•..'• ,\�_.�.'� Mission ��Centrsl K^`fD 7•o�e%'QBW et^� •'/ _ ' - :,�_�,;,._ I _ .Hi�•Sch;� w jAdopey\\ J •Ore ,' � --.-- - `�- _-_ -�-- ----- i1di55i •-PIa7a' • �VISCheil C! NORTH \> .� ,� .. �•P 775 /r�" In 24 tov/ / 'I vc �► hers rk�i.N �SC .4 SLO City Leekzi,f awthorne.��! �I^ ''♦ i' _ -568. `I railer � OVTN �lBl T _ 709 •V. •\„ I� IP I• %I © „Tler I 1 Mead N ^' �� q�=_ParkRadio Tower �(KATY) P-� T, 154 O--•� +� am Athletic ;..�.. --• s Field '- i - ' r- •` •'�� e` •• ': ; :•i DALIDIO ian AREA Ta6k �,� .� •:1 ':•:;�%:..,, PLANNING .p \ \ t.•`, �h � , . •: ':� SPI` ♦ ` // �� ; r\ � /Golf \w i7� ���''i :• __ _ _ \ eater Trailer Th1 �• �I •.L� Park Lag una ;v /'' k .', • i C Sar r \i l I---------.. - \V.- V. �: 1 `^r ` -- Trailer , �.%. Sewage �-- — ParK - ' - -- _ - 1 .Y SLO City Limits / ` Sane uis Obispo Fr00 rr o �: IDI Trailer • • • _ • • 1)Z .�y� Park o n 1 `o Pum 10 \ ---- - - :: 'i!i" n " �Stat on g. /70• �n •• 1• G�> „"N j . •its / ■1 — N 116 10 8. 12 7-1 Area Location: San Luis Obispo 12/14/93 Merriam Planning Associates Dalidio Development Plan Map 1.1 ILAGUNA LAKE / PF �O PF C-R C/I xc t C/OSYO-� A. R -2-S M -SP TARR /ARM ROAD 9 � / C -T i S.L.O SUBURBAN ROAD IPA Adjacent Land Uses and Zoning 12/14/93 Merriam Planning Associates Dalidio Development Plan Map 1.2 I 1 I I J I I Section III describes the proposed commercial development and related conditions in detail. This area is currently under option by the Dalidios to William and Marilyn Bird. The site plan for this area has been generated by their architect (Feola, Deenihan, Archuletta) and provides for a phase I development entirely on the Dalidio land which will accommodate a J.C. Penneys; Target and potentially Costco. A later phase could accommodate the expansion to Central Coast Plaza at such time as an agreement can be arranged with the lender on that property. Section IV deals with agency requirements; consistency with the General Plan; conditions as well as summarizing the constraints and environmental issues. In addition to the land uses proposed, the project description for the Dalidio Development Plan includes background information, site characteristics, environmental constraints, and public service capacities. Most of this technical information is provided in Appendix B, a separate document titled Planning and Environmental Background. B. OBJECTIVES AND SUMMARY OF PROPOSALS This Development Plan has been designed to meet five basic objectives which are contained in the City's Genera! Plan and Circulation Elements, (updated version). These objectives are listed below. 1. Annexation of inf11 land to maintain urban uses in a compact core and not on the City periphery. 2. Provide for the extension of the commercial development generally now existing in the Madonna Road area; (Madonna Plaza and Central Coast Plaza). If possible the new development would connect directly with Central Coast Plaza and provide the plaza with a second and third anchor. In addition, land would be allocated for a major discount store. 3. Provide a significant open space dedication to the City for park, visual, and agricultural open space purposes. 4. Allocate 11 acres of land for multi -family residential uses where there is easy access to shopping, recreation and transportation. I-4 5. Provide for the extension of Prado Road and a new interchange with U.S. Highway 101, allowing direct access to the regional shopping areas and a potential reduction of traffic from these centers on the existing Los Osos Valley Road and Madonna Road interchanges. C. SUMMARY OF PROPOSALS The Dalidio Development Plan has three basic components: 1) Open -Space. Dedication to the City of San Luis Obispo of a seventy acre open space easement with the Dalidios retaining fee ownership of the land as described below. The open space land will consist of three major components: A-1 A 55 acre open space agricultural area at the southeast. portion of the property A-2 A 10 acre reserve southwest of the sewer and water easement A=3 A 5 acre area of eucalyptus trees adjacent to the Laguna Lake outlet. ' Since there will be no exchange of money for the 70 acre easement, the Dalidios will hold a 10 acre reservation of land (A-2 above) which shall be kept in open space for 5 years. This iland is to be adjacent to the residential parcel and held for future potential recreational, residential or commercial uses. Upon acceptance of ten acre A-2 area for development, the remaining land governed by the open space agreement (60 acres) shall be dedicated to the City in fee for no additional consideration. In summary, the Dalidios propose to give the City 60 acres of open space land. In exchange, they will be allowed zoning for commercial development of 40 acres and 11 acres of residential land now and the potential to apply for appropriate development on the 10 acre reserve in the future: 2. Commercial Development: Commercial Retail (CR) zoning is requested for 40 acres of land adjacent to Central Coast Plaza. This land (designated "C" on the land use map) shall be located for easy access from the proposed extension of Prado Road and is designed to contain a total of approximately 500,000 square feet of commercial development. Approximately 350,000 square feet is proposed to ultimately be attached to the existing Central Coast Plaza or in small related pads, and approximately 150,000 square feet is reserved for a major discount store such as COSTCO. The 500,000 square foot.area may 1 I-5 I t I I 1 7 I I I L I 1 i JI _J I be developed in two phases with the major department stores on the Dalidio land being phase l and the mall connection to Central Coast Plaza being phase 2. 3. Residential -Development: Entitlement (R-3 zone) for a multi -family residential development on the area designated "B" on the attached Land Use map. This eleven acre parcel is felt to be especially appropriate, given its adjacency to shopping, commercial and recreational uses, for specialty housing such as for the elderly. At 18 units per acre, the residential area could hold up to 1,92 units. It it recognized that these units will be clustered to take maximum advantage of the site and preserve the eucalyptus trees that are on the site. Finally, it is recognized that this development is somewhat complex due to the requirements for a new interchange between Prado Road and U.S. Highway 101, as well as coordinating access with adjacent property ownets. The later phases may take several years to reach fruition. To preserve the. commitment on the part of both the land owners (both present and future), the developers, and the City, the elements of this development plan shall -be drawn up and accepted in a development agreement. The basic elements of the development agreement are set out in Appendix A4. I-6 0 LEGEND KEY A-1: Open Space PHASE 1 A-2: Urban Reserve Area A-3: Laguna Park Extension B: Multi -family Residential PHASE 2 C: Commercial Retail IhoA Proposed Land Uses by Area L12/14/193Merriam Planning Associates Dalidio Development Plan .3 I 1 TABLE 1: PROPOSED LAND USES (Dalidio Development Plan Area) (1) (REVISED 12-1343) . I I I I I 1 I I I J % Units or Plan Identification Category Acres to total Sq. Ft. Symbol (1) (2) (3) (4) 1. Med. High Den. Residential 2. Commercial.Retail (5) 3. Open Space (6) 4. Potential Urb. Reserve Uses 5. Laguna Park Extension 6. Road Rights of Way (7) GRAND TOTAL NOTES TO TABLE 1: 10.7 8.2% 192 B 40.0 30.5% 560,000 s. f. C 55.0 42.0% A-1 10.0 7.7% unknown A-2 5.0 3.8% A-3 10.3 7.8% 131.0 ac. 100% 1. The number of units and acreages identified in this table are for the purpose of determining the general land uses and their attendant impacts. It is possible that the actual number of units or the square footage will vary slightly up or down as actual site planning takes place. 2. Percentages based on 131 acres within the Dalidio Development. Plan Area. 3. The number of units allowed per acre for Medium High Density is 18. Density bonuses may be allowed by State law if certain criteria are met. Commercial development is calculated between 11,000 and 12;500 square feet per acre. . 4. See Map 1.3 5. This area is planned and designed so that it can be an extension of the existing regional shopping center complex. Linkage will occur with the approval of its owners. 6) The.acreage shown is for the dedicated open space.. Additional space,possibly up to 10% of the commercial and 20% of the residential areas will also be usable open space. 7) The acreage shown is for dedicated public streets -- Prado Road extension, Madonna Road widening and other links. Additional minor streets / driveways will be required in the multifamily and commercial areas. The -areas for these supporting streets will come from the net area for the designated use shown on Table 1. I-8 I I I I I I '1 I I I I D. PROJECTED PHASING AND PROJECT DEVELOPMENT The 40 acre commercial component will be the first area to be developed and may contain two phases. The first phase will be to accommodate:the majors and connecting structure on the property under option from the Dalidios. The second phase will be located on the adjacent Central Coast Plaza property which would physically connect the two developments with an enclosed mall building: In addition the applicants request the phasing flexibility to locate a COSTCO on the property. This flexibility is required to facilitate the timing of COSTCO which desires an 18 -month development schedule. At the same time, it is proposed that an open space easement be dedicated to the City of San Luis Obispo for approximately 10 acres. The next phase will involve the 12 acre residential property to be developed with approximately 200 units. The final phase is projected to be. the application for some form of appropriate development on the 10 acre reserve parcel. Phase 1: (upon annexation) la City takes over operation of park extension lb: Construct COSTCO with interim road connection as required.by City (18- 24 months) lc: Complete Mall construction and majors on Dalidio property (24.36 months) Phase 2: 2a: Complete Mail connection and shops to Central Coast Plaza 2b: Construct residential multi -family development Phase 3: Apply for appropriate urban use on ten'acre reserve (after 60 months) E. PREZONING REQUESTED The applicants are requesting that the City prezone the property as shown on Map 1.4.. This zoning is in general conformity with the acreages in General Plan update now in the hearing process though the exact lines vary given the Prado Road alignment changes. I-9 E=. FOR OFFICE C L M C P C A D O fCfiSCNALRS DNE STORT ENCLDSCD INLL - 41i1CIlIC SYRC! i �vDsr.� iEwsr.i -- iEwsr.i I It�� Zoning Designations Requested 1v14/s Merriam Planning Associates Dalidio Development Plan Map 1.4 A= 03 MAC OMN SPACE B= III -1 IIR-3 ZONE &unsAWY C= FICA ZONE It�� Zoning Designations Requested 1v14/s Merriam Planning Associates Dalidio Development Plan Map 1.4 I I I I I I I I I I t I I I i F. BACKGROUND INFORMATION Planning Area Location and Existing Uses The Dalidio annexation area is located in the southwestern section of the City. The property is immediately adjacent to the Madonna Road and Central Coast Plazas, the Laguna Lake residential development and the commercial services along Los Osos Valley Road, see Map 1.1: Map 1.2 shows the adjacent existing uses by zoning categories. Agricultural production.is the current primary land use of the property. Dry and partially irrigated field crops have been produced on the property. The crops planted have included garbanzo beans, dry beans and other miscellaneous field crops. More recent production has included irrigated crops such as cabbage and lettuce. Agricultural accessory buildings including residences, barns, silo, water tower and other accessory structures, occupy the portion of the Dalidio property adjacent to Madonna Road which comprises approximately 13 acres. The balance of the land along the outlet of Laguna Lake is covered with a dense grove of eucalyptus trees which were planted in the 1930's and are now mature and host herons and vultures that use the site for roosting. 2. Historical Background The Dalidio property, along with the Laguna Lake and Irish Hills area, has a colorful history which is briefly summarized below. As interesting as the history may be, however, there are no designated federal, state or local historical landmarks on or near the property. In the latter part of the 1700's, the Dalidio study area was used by the San Luis Obispo de Tolosa Mission for grazing. At the time the missions were secularized, they lost the right to use the unlimited amount of land they once. controlled. In 1844 California was still under Mexican control. GoverriorMicheltorena granted La Laguna, as the property was referred, to Bishop Joseph Alemany of the Monterey diocese of the Catholic Church. This consisted of 4,157 acres of the Los Osos Valley. Approximately -30 years later, the land Was sold to Captain John Wilson, the owner of the Rancho Canada de Los Osos, which E I I I I I i 1 I I I lay to the northwest of La Laguna. The properties were combined to form the Rancho Canada de Los Osos y La Laguna. In the 1880's the entire area was subdivided and sold in parcels. Just after the 1852 annexation of California to the United States, the Mission made an application for use of the water rights to be reserved to the community of San Luis Obispo as provided for under Mexican law. This application was never completed and the water rights remain with the land owners under applicable California law. In the early 1900's, a significant portion of the Dalidio property was dominated by a large horse race track and grandstand. The race track was removed in 1906 and the grandstand was moved and converted to -a barn which is still. on the property. The ground water in this area was utilized as a major portion of the City water supply starting in 1923 until the installation of the. Salinas Dam and reservoir by the Corps of Engineers in 1941. During the recent drought, the Dalidios again used their wells to produce water for the City of Sart Luis Obispo; a practice which continued until May of 1992. 3. Physical Site Characteristics The property shown in the Dalidio Development Plan is very flat. Most of the property has been in agricultural use since World War I. Some riparian vegetation is located along Perfumo Creek on the southwest comer of the Dalidio property. Riparian vegetation along Perfumo Creek channel consists of sedge, tules and rushes. Eucalyptus trees form a windbreak and visual screening on the Dalidio property along Madonna Road. These trees are mature and approximately 80 feet tall. There are also several cypress trees of comparable size amorg the eucalyptus -along Madonna Road on the Dalidio property. The principal wildlife found on the property is associated with the riparian vegetation along the Prefumo Creek channel and Laguna Lake and the eucalyptus trees which are used as. roosting and nesting sites for both herons and vultures. The riparian vegetation associated with the creek and the lake support several species of small animals, including snakes, lizards and frogs as well as other small invertebrates and birds. During the winter, the I-12 intermittent stream flow provided an occasional habitat_for steelhead trout; however, there are no gravel beds and the flows in the channel are so infrequent that no spawning occurs. L The types of birds commonly observed on the property and Laguna Lake include. hawks, owls, crows, herons, jays, vultures, doves, seagulls, black birds and others. Other mammals found on the property include raccoons, possums, skunks, mice, rabbits and gophers. Since the property has been in agricultural use, the area has been sprayed regularly which has eliminated the natural habitat value of the balance of the property. Laguna Lake is a major I habitat for. water fowl and fish. Laguna. Lake is a major stopping - off point on the Pacific Flyway. Birds nesting or foraging at the lake also visit the property. 4. Surrounding_ Land Uses r i I I-13 During the last twenty years, extensive development has occurred in the Laguna Lake area and along Madonna and Los Osos Valley Roads. This activity has resulted in a pattern of development that now almost completely surrounds .the Dalidio land and includes the Madonna and Central Coast Plazas to the northeast, the U.S. Post Office and Laguna park to the northwest, the _automobile -related commercial service and sales along Los Osos Valley Road Autopark and Way to the south and ;the Laguna residential areas to the west. The balance of the site to the east faces Highway 101 and the City sewer farm just beyond. Central Coast Plaza, located on the northeastern edge of the planning area includes 338,000 square feet of retail sales and hotel and conference facilities. Madonna Road Plaza just north of Central Coast Plaza contains approximately 289,000 square feet. r i I I-13 1 I I I I SECTION 2 OPEN SPACE AND RESIDENTIAL AREA A. INTRODUCTION As shown on Map 1.3 all but forty acres of the Dalidio 131 acres will be in uses other than commercial. An estimated 10 acres will be required for arterials and provision of the Dalidio portion of the interchange at Prado Road and U.S. 101. Approximately 11 acres are reserved Tor a high density residential area adjacent to Madonna Road though 3 to 4 acres of this area will be preserved in open space on the land in recognition of the stands of eucalyptus trees there. It is the intent of this proposal that this area be used for an approximately 200 unit housing project for the elderly or some similar group which can makespecial advantage of the area's relationship to transportation, shipping and recreation. The balance of the land will be held in some form of open space depending upon its location. I Sixty acres are proposed to be ultimately dedicated to the City either in the form of an addition to the park system or in open space which can be used for agriculture or other appropriate open space uses. The final ten acres will be field in.reserve with the Dalidio's retaining the right to apply for urban uses after five years of elapsed time from the date of annexation. This piece of land (designated "A-2" on Map 1.3) and its potential uses are more completely identified in the Development Agreement. At this time no urban uses are attached to it. Any future uses will have to be evaluated at the time of the rezoning: B. OPEN SPACE PROPOSALS Area Description: Visual open space will be provided in three different ways on the Dalidio Land. Referring to Map 1.3, the major open spaces are designated under category "A" which has approximately 70 acres most of which is now farmed. Under the proposed Development Agreement all of this land will be placed under an open space easement in favor of the City of San Luis Obispo with the provisions for each area as follows: � O 1 • Area A-1: (55 acres) This area is now currently being farmed and will continue to be farmed by the Dalidio Family or its designees until ultimate dedication to the .City. • Area A-2: (10 acres) This area is an extension of Area A-1 and will continue to be farmed by the Dal idio Family or its designees for minimum of five years after annexation of the land into the City of San Luis Obispo. At the end of this period, according to the Development Agreement, the Dalidios shall have the right to apply for recreational, residential, or commercial development on this 10 acre area and have to be made at the time of that application. - Area A-3: (5 acres) This land area is covered by the eucalyptus grove adjacent to the Laguna Creek Outlet. It is proposed to be given in fee to the City as an extension to the Laguna Lake Regional Park. It serves three purposes in that it will continue to provide u maintenance access to the channel, it will provide a linear extension to the park with a potential to connect all the way to Calle Joaquin for pedestrian and bicycle access to the Park and it will preserve the bird sanctuary for herons and vultures that now use the trees. Of course the visual backdrop of these Itrees which are a local landmark will also remain Applicant Proposed Improvements: At this time no improvements are proposed for any of the open space areas. The only potential development in these areas would be utility lines or street rights-of-way that might be conditioned by the City pursuant to its requirements. The existing wells will continue to be used and maintained by the applicant for agricultural purposes. 11 _J the City shall not preclude such application by General Plan or Zoning Policy. Upon rezoning and acceptance of reasonable development on said land, it shall be removed from the open space easement and development shall be processed by the City in a timely fashion. For the purposes of environmental review, however, this area cannot be considered to have any entitlements at this time. The precise environmental impacts of any proposal for the land will have to be considered at the time of application and it is recognized that anew environmental determination will have to be made at the time of that application. - Area A-3: (5 acres) This land area is covered by the eucalyptus grove adjacent to the Laguna Creek Outlet. It is proposed to be given in fee to the City as an extension to the Laguna Lake Regional Park. It serves three purposes in that it will continue to provide u maintenance access to the channel, it will provide a linear extension to the park with a potential to connect all the way to Calle Joaquin for pedestrian and bicycle access to the Park and it will preserve the bird sanctuary for herons and vultures that now use the trees. Of course the visual backdrop of these Itrees which are a local landmark will also remain Applicant Proposed Improvements: At this time no improvements are proposed for any of the open space areas. The only potential development in these areas would be utility lines or street rights-of-way that might be conditioned by the City pursuant to its requirements. The existing wells will continue to be used and maintained by the applicant for agricultural purposes. 11 _J I 1 I I I I I I 11 1 I I 11 I I Applicant Proposed Conditions: a. The applicant shall have the right to farm areas A-1 and A-3 until the land is deeded to the City of San Luis Obispo pursuant to the conditions of the Development Agreement. b. If the City desires public access to Area A-3, then the City shall insure and indemnify the. Dalidio Family and its heirs, assigns, and tenants from any public activities or damages that may result from such access. C. RESIDENTIAL LAND Area Description: The area designated as "B" on the proposed land use map is composed of approximately 11 acres. This area is being reserved for high density residential development for an elderly housing complex or similar housing which can take special advantage of the area's adjacency to public trtnspotlation, shipping and recreational facilities. This area is shown. in more detail on Map 2.1. It is expected that the minimum retirement community will require approximately 200 units with supporting services. This amount of development can be accommodated_ within the open space area of the site. No significant tree removal is expected and while thinning, of the eucalyptus trees. on the north of the property may be required for the trees health and the safety of those who may be walking below, this grove will remain as a visual and habitat feature of the site. The main portion of the eucalyptus grove to the south is.on the park land to be dedicated to the City. There are several clusters of trees adjacent to the land proposed for dedication which are effectively part of the habitat area. These trees will be preserved in open space on the residential land. At this time there is no proposal for development on this area and therefore no detailed site plans or conditions are appropriate. Amore detailed evaluation of any development and its related environmental effects at a project specific level will have to be made in light of an actual application. The general environmental documentation, however, does take into account the relative density of this area for traffic projections, development of utility requirements and a general understanding of how this land use will fit into the City's overall'planning projections. II -3 � / o I I J I I J I I I Merriam Planning cella �C 4y Lqv� at. I I \ � 1 I Conditons Residential Parcel Dalidlo 12/14/93 2.1 �\AM x � A Farm Support Housing 11 B Farm House B-2 Shed C Bam (Old Grand Stand) \ _ � ',I ', l _ D Shop :1 ;�i'— ,---%-._: \, E Storage i C • \ 11 •\ i j I I , , I 1 J I , „ , r I I A Merriam Planning cella �C 4y Lqv� at. I I \ � 1 I Conditons Residential Parcel Dalidlo 12/14/93 2.1 i C \ •\ i j I I I J I , r I I Merriam Planning cella �C 4y Lqv� at. I I \ � 1 I Conditons Residential Parcel Dalidlo 12/14/93 2.1 I I I EN LEGEND Cl= Laguna Park Extension Madonna Road Widening Eucalyptus Trees A Primary Habitat B Secondary Habitat Existing City Access Road Vehicular Access to Site MIPA Residential Development Constraints � I 12/ 14 /93 Merriam Planning Associates Dafidlo Development Plan Map 2.2 J n (I Anolicant Proposed Improvements: At this time no improvements are proposed. The widening of Madonna Road will affect the northwestern portion of the area. This widening will require a strip of land varying between 17 and 19.5 feet. Applicant -Proposed -Conditions: a. The applicantshall have the right to use the farm support buildings as part of the continuing farm operation related to areas "A-1" and "A-3" until such time as there is a �j development proposal for the area. I I I A 11 b. Any detailed conditions affecting this area or requiring major improvements shall be considered and applied at the time of an actualdevelopment proposal for this area c. Access for residential development shall be, from a new road parallel to the drainage swale to the east of this parcel. As long as the area continues to be used in support of the farming operation, access may coniinue to be from Madonna, Road. II -6 !� o I 1 J I A 1 I I I I SECTION 3 COMMERCIAL DEVELOPMENT PROPOSED A. INTRODUCTION The area covered in this chapter is that designated on the proposed development plan as area C and is proposed to be.zoned Retail Commercial and ultimately become an integral part of the Central Coast Plaza complex. As shown on Map 3.1 the development proposed will have a direct addition to the Central Coast Plaza with space for two department stores and, in addition, a large discount store location. There are also some smaller stand-alone pads for restautants and similar retail activities. The objectives of the commercial development are to attract desirable retailers to the City of San Luis Obispo of a type not presently represented in the city. This includes two department stores and a major discount store as outlined in the City's economic task force report. B. DESIGN Given recent developments in .rerouting Prado Road and changes in the ownership of Central Coast Plaza, the commercial design has been revised to reflect these conditions. The basic design concept will be to continue the stucco and tile character of the existing Central Coast Plaza. The main freeway elevation is shown in Figure 3.1. The first phase will be for the Target Store area and is shown at the left. Phase 2 will incorporate the connection to the existing Central Coast Plaza and will provide both physical and visual continuity. The site plan shows major pedestrian connections between the buildings including the independent discount.store (Major 4). These relationships will be shown in more detail on the landscape plans. There are also pedestrian connectors between the parking lots and the stores. The entry to the new shopping centerwill focus around a small plaza shown between Majors 2 and 3 (J.C. Penny and Target as now proposed). Map 3.2 shows the major circulation concepts proposed for the commercial area. These are three fold: • Prado Road will provide the boundary of the commercial area and provide visual separation with the open space to the south-ast.: The main internal vehicular circulation routes will be separate from the parking aisles. The proposed I i6n,of this arterial is shown on Figure 3.2. • Bus stops are provided at critical locations., The major new City transit,stop will beat the entry plaza to the mall. The bus will then loop,back to the existing stop near Gottschalks. Bus service is also provided to the Pacific Suites Hotel for airport shuttle service, etc. I • Pedestrian amenities have been discussed above and will be developed in more detail with the landscape plans. 11E I 1 1 1 1 1 1 I 1 1 I 1 1 1 1 is o` z1. FF." ' W oo T�lil � lsro8 N EL MERCADO PACIRC Sl!lTES GOTTSCHALKS 7 -STORY ENCLOSED MAU HOTEL r Q ij D OPEN SPACE MAJOR 4 � �° d I I II ,x:,w a• _ �� / QP PA Commercial Development Site Plan 12/14/93 Merriam Planning Associates Dalidio Development Plan Map 3.1 b 8 CL a O Z IPA Commercial Elevations from Frwy 101 12/14/93 Merriam Planning Associates Dalidio Development Plan Fig. 3.1 RESIDENTIAL: h2A Merriam Planning .... MAJOR PEDISTRIAN LINK ® BUS ROUTE 440 BUS STOPS A D.0 Major Circulation Concepts SCALE: 1* -400' .Map 3.2 o < W z< Z SU V� N Z. g W S ¢O Or TWa Q � u N Z < QIuJ b �Q and I /r h 0 Z J > U W _' Q J W > 7 Z `O_Al V Q W Z lit X W _ W JW Z Q >J Q • W /0/� LL _22 2 >J O m X Q m J LL ` W J H M < -C W Z J CC~ CC J IL< �A Road Crossections Proposed 12/1.4/93 Meriiam. Planning Associates Dalidio Development Plan Fig. 3.2 I l 1 1 1 1 J 1 0 SECTION 4 OTHER CONSIDERATIONS A. UTILITY CONSIDERATIONS Maps 4.1 (Sewer) and 4.2 (Water supply) show the basic location of these major facilities as they would be required to connect into the City systems. It is recognized that these are diagrammatic at this time pending further review by the City. The potable water supply will be supplied from Citysources as required by Cityordinance. Irrigation water will be ,provided from on-site wells thus not drawing from the City's treated water. As the agricultural operations cease and the open space land is deeded over to the City, the Dalidio water wells will also be deeded over. This major water supply should provide a water reserve in the neighborhood of 2,000 acre feet per year andmill more than off set the demand created by the urban uses proposed: B. GRADING AND DRAINAGE The area is subject to flooding as shown on the FIRM maps. A preliminary evaluation has shown however that the building pads can be built up a. foot above the flood levels and meet. City code requirements. The process will be the same as was done for the existing Central Coast Plaza. The majority of the area subject to flooding will. remain in open space. State law requires that no project can cause additional flooding to downstream land owners above what they already have under existing conditions. A detention basin will be necesgary and this will be provided near the southeast border of the property. The engineering projection is that this would be a very shallow and relatively large area basis that would simply put the.agticultural land under 12 to 18 inches of water at the peak period, see Map 4.3. IV 1 F1 1 1 1 1 The existing drainage swale will have to be enlarged somewhat and a new facility constructed adjacent to the Prado Road extension to carry runoff generated by the new commercial center. The location of this facility is generally identified on.Map 4.3 and will also carry some of the Central Coast.Plaza runofias well. C. SUBDIVISION AND, OTHER PROCESSING REQUIREMENTS The forty acre commercial area, as is typical in this type of project, will require subdivision for the major retailers so that they can purchase and own, their respective land and buildings. The restaurant and stand alone pads may be leased or sold depending on the particular user and their specific requirements. The applicants know that the major retailers arequite anxious to be open and doing business and will be presenting their own plans and applying for separate construction permits, though they will have to comply with basic location and design character requirements. IV 2 I ------------- tCosT J ---- — ------ ----------- ....... —0-0 MAMA 2 I' ,il I 1 1 V COMMERCIAL RESIDENTIAL ti URBAN ✓ RESERVE OPEN SPACE m OPEN SPACE $CAL& r. W' . . . . . . . . . . . . .......... HFA Diagrammatic Sewer Plan 12/14/93 Merriam Planning Associates Dalidio Development Plan El YE IC a :7 SCALE, r -GW . ................ .. ......... T !f MAA" Cw MT oma;! Ir COMMERCIAJL 4 RESIDENTIAL'L- ti I ii U RBAN RESERVE V�A 4 J Y"4 OPEN SPACE 0 \,`-OPEN SPACE I r ............. . . ---------- Ind car. Diagrammatic Water Supply Plan Merriam Planning Associates Dalidio Development Plan Map 4.2 SCALE, r -GW I r ............. . . ---------- Ind car. Diagrammatic Water Supply Plan Merriam Planning Associates Dalidio Development Plan Map 4.2 .4, ............................... MT L; .. . ........ --------------- ............. ..... ICONMER IAL RESIDENTIAL ii MWAMMR�-'MR URBAN OEM V /.sD.m � hoA Merriam Planning em Associates N OPEN SPACE SCALE, r.&W Diagrammatic Drainage Plan Dalidio Development Plan 12/14/93 Map 4.3